Whatever their form, financial statements must be complete, accurate and thorough. In business plans, three-year and five-year projections are considered long term, and your plan will be expected to cover at least three years.
Personnel Plan If your business will have employees and not just managers, you will need a Personnel Plan showing what types of employees you will have for example, cashiers, butchers, drivers, stockers and cooksalong with what they will cost in terms of salary and wages, health insuranceretirement-plan contributionsworkers compensation insuranceunemployment insuranceand Social Security and Medicare taxes.
Break your financials down into monthly projections for the first two years and then move to annual projections. In addition to financial statements for your company, if you are a new business, you may need to provide personal financial statements for each owner.
Your liabilities will include accounts payable, wages and salaries, taxes, rent and utilities, and loan balances.
Structuring Your Financial Plan Begin your financial plan with information on where your firm stands financially at the end of the most recent quarter what its financial situation has looked like historically. Do you plan to sell the business outright to another individual or company?
Be aware that lenders do not count the full value of your collateral, and each lender may count a different percentage.
When they are considering doing so, they will be comparing the risk and return of working with you to the risk and return they could get from lending to or investing in other companies.
So the financials of your plan can certainly be referred to as the heart, the meat, the big enchilada -- insert your own mega metaphor here. For example, your assets will include cash, accounts receivable, inventory and equipment.
Also, remember to have documentation to back up this information. You have to convince them that your business is the most promising option. Even if you and all of your business partners know exactly what you are doing, you may still want to hire an unbiased, outside professional to check your work and give you a second opinion on whether your projections are realistic.
Banks offer several types of loans to businesses that do not present too much risk. Potential investors will want to know when their investment will pay off and how much of a return to expect.
How much will have to be spent on computer equipment, office furniture, etc? You can break these down into "operating projections" or "capital needs" or whatever makes the most sense based on your needs and what you are seeking. And the type of funding you need will dictate how your plan especially the financial section is written.
To learn more about what investors will be looking for, see Reading The Balance Sheet Use realistic projections. Proposed Repayment Schedule or Exit Strategy Potential lenders will want to know how and when you intend to repay the loan or line of credit, so you should put together a proposed repayment schedule and terms.
It may be well worth the expense to enlist the help of an accountant to prepare them, or at the very least to review them. Sales Forecast The Sales Forecast is a chart that breaks down how much your business expects to sell in various categories by month for the next year and by year for the following two to four years.
Investors vary in their standards, but most like to see positive cash flow within the first year of operation, particularly if this if your first venture. Lenders may want your statements presented in a certain way, so ask before you draw them up. For a cleaning service business, the sales forecast might list one-time cleanings, monthly cleaning contracts and annual cleaning contracts and further break those down by houses, condos, apartment units, entire apartment buildings and office buildings.
For many, the financial portion of your business plan is its heart.
Since this is a very critical part of your business plan, make sure you follow Generally Accepted Accounting Standardsand that your financial statements are all prepared correctly. Then describe how these funds will be used.
Which source you choose, will depend on the amount of funding you need. If you think about it, why else are you going into business? Lenders and investors want to know what kind of numbers your company is working with and whether your company is profitable or expects to be soon.
They will also want to see that you have an exit strategy to cash out on your investment — and theirs.
What will your exit strategy be if the business is failing?The Income Statement is one of the three financial statements that you need to include in the Financial Plan section of the business plan. The Income Statement shows your revenues, expenses, and profit for a particular period.
SAMPLE NEED STATEMENTS Successful Needs Statement: This is a good example of a needs statement. The author first references the community problem • # and % of tutors who attend an in-service program who can successfully create a lesson plan to use with their student at the end of the training.
(Self-assessment by tutor at end of workshop). Grizzly Bear Financial Managers financial planning business plan executive summary. Grizzly Bear Financial Managers are financial and estate planning portfolio consultants and portfolio managers.
The 11 Slides You Need to Have in /5(53). What makes up the heart of your business plan is the profit and loss (or income) statement, the balance sheet, and a cash-flow statement. If your business is a startup, these will all be projections, or pro forma statements.
If you're writing this for an existing business, then these statements will reflect your past business history and current. Jul 03, · The Key Elements of the Financial Plan.
by This article will explain everything that you need to include in your financial plan so you get off to a good start. If you use the cash method of accounting in your business, your cash flow statement isn’t going to be very different from what you see in your profit and loss statement.
/5(25). The Financial Section, in many cases, is the most scrutinized section of your business plan. In short, it provides details on how potentially profitable the business will be, how much debt and equity capital is required for the business venture, and when debts are scheduled to be repaid to investors.Download