Business and Financial Needs

Posts Tagged ‘The Financial Plan’

The Financial Plan is the translation into numbers the rest of the plan. Gathering information about what we need to start the company, people who go to contract, the sales forecasts we’ve made, etc. is time, in this part of the plan, to translate into numbers in order to see the viability of the project and what are the forecasts.

The financial plan usually consists of:

Investment plan: is entered everything needed to start and how much it costs (purchase of computers, local settlement, notary fees, etc..) And then specifies how we will pay it. If we can not cover the total needed to start rolling with the equity that we we’re going to seek external funding (ie a loan).

Account of expected results: on the one hand we analyze revenue they expect to hold and, secondly, the cost of operation. Once all together, we see the results every month during the first year to go see the profit or loss. We must also do so for the following years (accumulated over months or quarters for example the first 3 years) as normal is to close the first year with losses.

Balance pension: we enter what our bottom line each year. With our assets, liabilities and net.

Cash budget: similar to our estimate of expenditure (that we make to the income statement) but given time payment, not spending (ie where does the money of our own, not when they incur debt) that will control cash, essential in every business and particularly in the new, which is vital to have liquid resources and become usual for a sensitive issue.

These items above are basic, but others can be added as a breakeven analysis, for example.

Key Tips:

“It is time to be creative, but seriously, so if you are unsure it may be best to consult a professional.

-Make several scenarios, one pessimistic, one optimistic and one normal.