Financial Plan
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As mentioned in “Standard Business Plans“, a business owner does not necessarily need to understand the debits and credits of double entry accounting, but they do need to understand the implications of the information provided in cashflow statements, profit and loss, and balance sheets, and need to understand the process of budgeting for future growth.
A good financial plan for an established business will consider past sales, cashflow patterns, major expenses, growth (or loss) trends, and the asset to debt ratio of the business. It will also consider market and industry trends, in order to stay competitive in the current environment.
By examining the past, reasonable assumptions can be made about future performance, and plans made to cover most eventualities.
For a new business, it is usually possible to estimate most expenses. However, often new business owners get stumped when trying to create realistic sales projections. Without a history, they are unable to work out what is a “reasonable” forecast.
Fortunately, it really isn’t as difficult as they might think.
Appendix A - Financial Statements (monthly for first 12 months, quarterly for next 2-4 years)
* Cash Flow Projections with assumptions in footnotes
* Statements of projected Profit & Loss
* Statements of projected position (Balance Sheet)
Appendix B - Sales Projections
Appendix C - Detailed Advertising and Promotional Plan
Appendix D - Market Research Data
Appendix E - Resumes
Appendix F - Leases or contracts
Appendix G - Price lists from suppliers
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