Talking about finances, in business, the lack of planning may lead to a painful ending.
Despite having a brilliant idea and a winning product or service, you need to ensure that the total revenue is higher than the total expenses. At this point, you need to understand if the revenue covers your costs, this is called The Breakeven Point.
All the resources that you use in your business have a cost, the place where you operate, equipment that you use, utilities and so on. You need to identify all these resources and their estimated cost.
Some of these resources need to be purchased or paid at the starting point, those are known as initial investment while others are paid on a monthly basis.
Just after determining the structural costs, you can decide the price. Depending on your target customer, you will be able to set a price that delivers the margin you need. How much product or services you sale depends heavely on the marketing strategy that you use and definitely it will be key to reach the breakeven point.
Sometimes an entrepreneur has some savings to start the new business without a loan, but the majority of entrepreneurs need some backup finance. That is the point: Banks or other investors won't give you the money before seeing the numbers. An investor may ask you what is the internal return rate. You have to show the financials. The analysis isn´t too complicated, in fact all formulas are available everywhere, but probably you may need some expert help. You know the details of your business idea, you are dreaming about it for a long time, but this lack of financial knowledge may delay your idea unnecessarily.
A business plan is a document that shows the concept of your business idea, is the evidence that you made the market research, is the proof that you are taking the challenge seriously. It must have a complete set of financial information that indicates to potential investors that your new business can be successful.
Using a free business plan template could be a good starting point while you complete business research and if you have a good financial knowledge for sure, you will be able to create your own business plan.
Looking for an expert will give you more confidence, at the end the stakes are high. It´s not expensive, you can get a complete and professional business plan just for few hundred dollars. No a generic business plan but a tailored one made by experts.
Nowadays there are many online experts, look for experience, if you have some doubt, call them, ask for some samples. People who creates this kind of documents have a lot of knowledge to advise you in the right direction.
Good luck researching!