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So now you are planning to startup a business. There are some elements in making a business plan. One of the elements is financial component. Financial data usually come after business concept and management team. However, it doesn?t mean that financial is less important than the two components.

The investors will certainly take a look at the financial data that are usually in form of charts, tables, formulas and spreadsheets. They understand that the information in the financial section is the strength of the business. They will judge whether the business is qualified for investment or not by looking at the financial information. There are three financial statements to provide an accurate picture of a company?s profitability. They are a cash flow statement, an income statement, and a balance sheet.

Cash-flow statement is the critical information for business. It shows how much cash you will need to meet obligation. Meanwhile, income statement is a simple report that shows the general ability of the business. It shows the picture of previous financial models such as revenue, expenses, capital, and cost of goods. The last part that should be in the financial section is balance sheet. It is an annual basis of a business plan that provides financial information including assets, liabilities, and equity. When you have got the three financial components, means that you are ready to start your business.

As an element of a business plan, competitive analysis must be clearly stated. It should consist of strategy of the business and strategy to face business competitors. By stating competitive analysis, you will be able to know the strong and weak points of your competitor so that you will be able to make the best strategy to win the competition. Using the competitive analysis, you will be able to change any limitation to be your strengths that can be used for preventing your competitors to enter your market.

In order to make a clear competitive analysis, you will need to identify your competitors. Basically, you can group your competitors based on two things, customers? point of view and strategies your competitors use. Then, you should analyze their strengths and weaknesses in order to know their position in the market. Knowing such information will enable you to determine what the right strategy is. This information will help you to make effective marketing campaign by highlighting any assets your competitors don?t have.

There are many ways to make competitive analysis and one of them is by making a grid showing the strengths and weaknesses of your competitors. Through the grid, you will easily find out what factors you should highlight, develop and improve. Therefore, to set a distinct business strategy, competitive analysis is highly recommended.