Investment Company Business Plan Leave a comment

This sample plan was created for a hypothetical investment company that buys other companies as investments. The hypothetical Venture Capital company starts with $20 million to start its initial investment fund. It invests $5,000,000 in each of its four initial companies within the first month of its existence. It receives a management commission of two percent (2%) from the fund’s value each quarter. It pays salaries to its associates and other employees. The management fee covers office expenses.

The cash flow table lists investments as long-term investments. They are also included in the balance sheet as long term assets. You can see them in this sample plan, in the first few months.

One of the target companies fails the third time, and $5 million is written off. You’ll see that the result is a $5m sale of long term assets in the cashflow and a balancing in of $5m in sales costs in the profit and losses. It results in a loss that year and a write-off. The tax loss is $15 million and the balance of investments is $15 million.

One of the target companies has a turnover of $50 million in the fifth year. The sample will show you how this translates into a $45million equity appreciation in forecast sales and a $5million sale of long term assets in cash flow. There is a $45million profit and the remaining long-term assets are down to $10million.

This is an example. This business model holds long term assets and waits until they appreciate. It doesn’t reflect the appreciation of assets, nor does it show write-down until assets are sold. The sales and cost of sales include the appreciation and writing down of assets as well as management fees.

This explanation has been broken into key topics and copied to be linked to the tables. These topics are:

• 2.2 Start-up Summary
• 5.5.1 Sales Forecast
• 6.4 Personnel
• 7.4 Projectioned Profits and Losses
• 7.5 Cash Flow Projected
• 7.6 Projected Financial Balance Sheet