Sample financial section of a business plan
Books have to balance, so the initial estimates need to include not just the money you spend, but also where it comes from.
Your accountant, business plan templates, and the many accounting software tools on the market can help you create the financial section of your business plan and determine what you need to include. The following financial statements and analysis have been forecasted over a three year period.
In a nutshell, the Income Statement shows your expenses, revenues, and profits for a particular period. I included rent and payroll because they point out the importance in timing. Even if you don't need financing, you should compile a financial forecast in order to simply be successful in steering your business.
Finance How to Write the Financial Section of a Business Plan An outline of your company's growth strategy is essential to a business plan, but it just isn't complete without the numbers to back it up.
How to Write the Financial Section of a Business Plan The financial section in a business plan is divided into three segments - income statement, cash flow projection and the balance sheet, along with a brief analysis of these three statements.
Financial summary example
This is done mostly under the time frame of three fiscal years. Use the numbers that you put in your sales forecast, expense projections, and cash flow statement. The Income statement can be generated keeping in consideration three scenarios: worst, expected, and best. The cash flow projection is the next financial statement that you need to include in the financial section of your business plan. Important elements that are considered in the break even analysis include: The fixed costs Variable costs Selling price Also, the items present in the income statements are quite vital when doing the break-even analysis. Many people get confused about this because the financial projections that you include--profit and loss, balance sheet, and cash flow--look similar to accounting statements your business generates. Some business planning software programs will have these formulas built in to help you make these projections. The financial statements themselves the income statement, cash flow projections, and balance sheet should be placed in your business plan's appendices. Most businesses draw it at the end of their fiscal year. As advised in the reference article, Always use What-if scenarios while projecting your financials.Startup assets: Typical startup assets are cash the money in the bank when the company startsbusiness or plant equipment, office furniture, vehicles, and starting inventory for stores or manufacturers. Ideally, you know the business you want to start, you are already familiar with the industry, so you can do a useful estimate for most of the startup costs from your own experience.
If you have a product-based business, the revenue section of the income statement will look different.
