Lesson 4: Business Plan and Finance

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If you want to start your solar module production business, than you will have some equity (your own or from a partner), you will need maybe another investor and a bank for the loan.

If you want to have money from anybody, you have to convince him, that an investment in your business will be a good idea and he will earn a lot of money with it. This you will have to proof so the one who will decide for the money will have trust in you. The best way to create trust is a professional business case / business plan.

One part of the business plan with the description of what you are planing. There you will write about your product, what makes it special, where your location of the factory will be (and why exactly there), what will be the management structure, you will explain your marketing strategy (pricing, competition) and a lot more. This is important for an investor to realize the whole project in detail.

The written parts will have a lot of arguments why your production will be successful, you will have to make graphics and tables with facts and researches.

In the financial modeling you have to proof all what you promise in detailed figures: You make a detailed plan about the investment, what will be the costs for the production, what will be the material prices of all components in a panel.

You have to make a 5 years calculation of the cash flow and show the return of invest, the maximum invest that have to be done and you have to make different scenarios (worse case, normal case, best case).

The first thing that an investor wants to see is a small summary called "Management Summary" or "Executive Summary".

Here you make a summary of the written part and the financial modeling to an ultra compact information paper for the investor. All the most important points have to be inside like:

• Cash Flow
• Balance Sheet
• Break Even
• Profit an Loss
• Strategy
• And more

All these figures you will get out of your detailed plan.

After reading this summary the investor will decide if he wants to go into the details or not. So this is the first chance for you to convince the investor. If you will be successful in this part and - very important!!! - you are able to proof all this with a professional complete plan, than you will have a good chance to get the funds.