Business Plan Essentials: The Financial Plan

 

business plan chapters

The business plan should give clear and concise information on all the important aspects of the proposed new venture. Style or format of the business plan It should look sharp but not give the . target market, and the financial goals of the business. If your plan is designed to help you get a bank loan, include the information about the amount, type and purpose of the funds your are seeking. Main financial measures Cash , 82, , Sales . marketing plan. A section of the business plan that describes the user benefits of the product or service and the type of market that exists. mini-plan. A short form of a business plan that presents only the most important issues and projections for the business.


How to Write a Business Plan (Step-By-Step Guide)


The financial section of your business plan determines whether or not your business idea is viable and will be the focus of any investors who may be attracted to your business idea. This article will guide you in the preparation of each of these three financial statements. Before you begin, however, you must gather the financial data you will need including all of your expenses. Think of your business expenses as two cost categories; your start-up business plan chapters and your operating expenses.

All the costs of getting your business up and running should be considered start-up expenses. These expenses may include:.

Operating expenses are the costs of keeping your business running. Think of these as your monthly expenses.

Your list of operating expenses may include:. Once again, this is just a partial list. Once you have listed all of your operating expenses, the total will reflect the monthly cost of operating your business.

Multiply this number by 6, and you have a six-month estimate of your operating expenses. Adding this amount to your business plan chapters startup expenses list, and you have a ballpark figure for your complete start-up costs. Now you can begin to put together your financial statements for your business plan starting with the income statement.

The income statement is one of the three financial statements that you need to include in the financial plan section of the business plan chapters plan. It shows your revenues, expenses, and profit for a particular period - a snapshot of your business that shows whether or not your business is profitable, business plan chapters.

Not all of the business plan chapters in this income statement will apply to your business. Eliminate those that do not apply, and add categories where necessary to adapt this template to your business. If you have a product-based business, the revenue section of the income statement will look different, business plan chapters.

The cash flow projection is the next financial statement that you need to include in the financial section of your business plan. For you, it is an important tool for cash flow management because it indicates when your expenditures are too high or you might need a short-term investment to deal with a cash flow surplus. Do not confuse the cash flow projection with the cash flow statement. The cash flow statement shows the flow of cash in and out of your business.

In other words, it describes the cash flow that has occurred in the past, business plan chapters. The cash flow projection shows the cash that is anticipated to be generated or expended over a chosen period in the future, business plan chapters. You should include cash flow projections for each month over one year in the financial section of your business plan. There are three parts to the cash flow projection. The business plan chapters part details your cash revenues.

Enter your estimated sales figures for each month. Only enter the sales that are collectible in cash during each month you are detailing, business plan chapters. Take the various expense categories from your ledger and list the cash expenditures you actually expect to business plan chapters that month for each month. As the word "reconciliation" suggests, this section shows an opening balance, which is the carryover from the previous month's operations.

The current business plan chapters revenues are added to this balance; the current month's disbursements are subtracted, and the adjusted cash flow balance business plan chapters carried over to the next month. Here is a template for a cash flow projection that you can use for your business plan or later when your business is up and running :.

Once again, business plan chapters, to use this template for your own business, delete and add the appropriate revenue and disbursement categories that apply to your business. When building your cash flow projection, a common pitfall is being over-optimistic about your projected sales.

The balance sheet if the last financial statement that needs to be included in your business plan. It summarizes all the financial data about your business in three categories; assets, liabilities, and equity. Retained earnings are earnings kept by the company for expansion; that is, not paid out as dividends. Current earnings are earnings for the fiscal year up to the balance sheet date income - the cost of sales and expenses.

A business typically prepares a balance sheet once a year. Here is a template for a balance sheet that you can use for your business plan or later when your business is up and running :. Once again, this template is an example of the different categories of assets and liabilities that may apply to your business, business plan chapters. Modify the categories in the balance sheet template to suit your own business.

Once your balance sheet is complete, write a brief analysis for each of the three financial statements. The analysis should be short with highlights rather than in-depth analysis.

The financial statements themselves the income statement, cash flow projections, and balance sheet should be placed in your business plan's appendices. Small Business Business Plans. By Susan Ward. Business registration fees Business licensing and permits Starting inventory Rent deposits Down payments on property Down payments on equipment Utility setup fees. Download the Income Statement Template. A liability is a debt owed to a creditor of the company. Download the Sample Balance Sheet Template.

Article Table of Contents Skip to section Expand. Taking Stock of Expenses, business plan chapters.

The Income Statement. The Cash Flow Projection. The Balance Sheet. Continue Reading.

 

Business plan - Entrepreneurship

 

business plan chapters

 

marketing plan. A section of the business plan that describes the user benefits of the product or service and the type of market that exists. mini-plan. A short form of a business plan that presents only the most important issues and projections for the business. The Executive Summary. Regardless of the business plan format chosen, the executive summary always appears first in the document. Its purpose is to educate and inform the reader about the company. It should explain where the company is at the present time, where it is going and how it plans to be successful. Outside of your basic eligibility requirements (see Chapter 2 for the 5 C’s), your business plan is the top element lenders will review to determine your attractiveness as a borrower. Having a solid business plan with clear ideas makes it easier it is for banks to see that your business will be successful, and therefore that you’ll be able to repay the loan.