Your boss has asked you to prepare an internal business plan to evaluate a new company project, with a projected annual cost of about $250,000. What is the purpose of his request and what are your first steps to accomplish this?
Understandably, he wants to compare what your company is doing now — its operational costs, its required resources, its profitability — based on what you could achieve with the same $250,000 investment.
The first thing your plan should show is the time it will take for the company to break even on its investment; that is, how long after the launch it will take to generate a positive cash flow and pay back the initial investment.
Your plan should also detail how the $250,000 will be spent. For example, how much will be allocated for hiring, outsourcing, marketing, and technology?
You should also demonstrate that there is a market demand for the additional or improved product you’re launching. You’ll need statistics on the total size of the market (dollars or units), how much of that market you can expect to capture, and how that (positively) affects the bottom line.