Additional Financial Information In addition to financial statements, prospective lenders or investors will also want to see a Sales Forecast and, if your business will have employees, a Personnel Plan.
Funders may also want to see an analysis of how your results would change if some of the variables changed, so consider including a section on that, as well.
Will you have trade credit, and how long will you have to pay your suppliers? 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. Each number on your spreadsheets must mean something. Lenders and investors want to know what kind of numbers your company is working with and whether your help with business plan financials section is profitable or expects to be soon.
Financiers want and often require entrepreneurs to put their own funds in the venture, and the greater the portion you commit relative to your net worththe better.
For a grocery store, the sales forecast might list projected sales of fruits, vegetables, dairy, meat, seafood, packaged goods and hot prepared meals. Include projected income statements, balance sheets, and cash flow statements, which we described above, along with a capital expenditure budget.
Your financial statements should show both a long- and short-term vision for your business. If you use an accountant, and your financial statements have been audited, make a note of that in the plan. Remember, no one has to lend you any money or invest in your company.
Business Insider offers a look at how to make realistic projections that will be meaningful to your business as well as to lenders and investors. Potential investors will want to know when their investment will pay off and how much of a return to expect.
A bank, for example, may want to see monthly projections for the first year, quarterly projections for the second year and annual projections for the third year. This shows the amount of revenue you need to recover your startup costs break even and start making a profit.
Whatever their form, financial statements must be complete, accurate and thorough. This is one part of the business plan that you may want to get some outside assistance with, perhaps from your accountant or financial advisor, to help put the numbers together and present them properly.
Do you want a transaction loan, with which you receive all the money at once, or a line of credit that lets you draw on funds as you need them? To learn more about what investors will be looking for, see Reading The Balance Sheet Use realistic projections.
The International Finance Corporation has a primer as part of its Small Business Toolkit that offers great tips on putting all of these statements together. Be aware that lenders do not count the full value of your collateral, and each lender may count a different percentage.
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. Tax Returns How your business is structured will determine which tax forms you have to file with the Internal Revenue Service each year, so these may be your personal tax returns with a Schedule C attachment, or separate corporate tax returns.
Your liabilities will include accounts payable, wages and salaries, taxes, rent and utilities, and loan balances. 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.
Your balance sheet must balance at the end of every period. Your income statement must reconcile to your cash flow statement, which reconciles to your balance sheet. You have to convince them that your business is the most promising option.
Your credit history or a copy of a recent credit report can go in the appendix, together with copies of your tax returns or any additional information a lender may request.
A startup business should show monthly details in the cash flow and income statements for the first year of business, along with quarterly information for two more years.
Banks offer several types of loans to businesses that do not present too much risk. At what point have you determined that you will cut your losses and sell or close down, and how will you repay investors if this happens?
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.
Within each category are numerous subcategories.
If your business is new, your statements will be speculative, but you can make them realistic by basing them on the published financial statements of existing businesses similar to yours.If you have a killer idea for a startup, but lack the time, resources and budget to develop a business plan, a business plan-generating app can help you get your plan on paper and, ideally, off.
This quick guide offers tips that will help you create the financials section for your business plan. Video Podcasts Start A Business Subscribe Books Project Grow. Jan 12, · Example of the Financial Section of a Business Plan.
Financial projections are vital to you, too. Financials, they plan you to plan and for for your new doing. How to write the financial plan section of the business plan: the income statement, cash flow projections, and the balance sheet (templates included).
will help you avoid this and provides a detailed explanation of How to Create Your Business Plan Financials. The financial part of a business plan includes various financial statements that show where your company currently stands and where it expects to be in the near future.
This information helps you. For more in-depth help and assistance, click on the "Business Plan Financials Help" menu in the toolbar. The help files cont worksheet, along with a "Frequently Asked Questions" (FAQ).
To get started, click on the right-pointing arrow in the Planning Shop toolbar to reach the "Setup and Assumptions" wor information about your business%(13).Download