Financial plan of a business plan: prerequisites for drawing up

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The largest and most important step in preparing for a business is the financial plan of the business plan. The information contained in this section is the main one for providing it to business partners, investors. For them, this is the main

material for assessing the ability of a new enterprise through its activities to provide an inflow of funds in an amount sufficient to repay loan obligations, pay dividends. The financial plan of the business plan should be transparent, logical, understandable. For a worthy assessment, it is necessary to indicate in it who compiled the cost scheme - the specialists of your future company or third-party appraisers. The clearer and more logical the financial section of the business plan, the easier it is to set qualitative goals and achieve quantitative indicators. Of course, such a presentation of a startup will be more interesting for investors and partners.

If in the future it is planned to create a resource-intensive production enterprise with a large turnover of cash, materials, raw materials, labor, with a large loan, then it is more reasonable to make the financial part of the business plan, or rather its preparation,entrust to expert companies. This increases the chance of having a competent document in which all calculations are economically justified. A business plan financial plan developed by experts is likely to be more favorably received by investors and lenders. This is an important moment for any startup.

The financial plan of the business plan must contain reporting forms: financial and accounting. Of course they should be

legislatively approved. As a rule, there are three such reports:

1. profit and loss statement;
2. cash flow;
3. balance sheet.

The first of these documents contains all the information about the company's activities by reporting periods: decade, month, quarter, year. The second is called "Cash Flo". With its help, a sufficient amount of money supply is determined for the implementation of loan payments, the issuance of wages, the purchase of materials and raw materials. The third allows you to assess the financial condition of the company at any time. These are liabilities and assets, the entire property condition, its sources of occurrence.

It is equally important to describe the schemes of cash receipts, guarantees, and liability. The financial part of the business plan in the same section usually contains a clear description of the state of the economy at the time of development, a forecast for the near future. It would be useful to assume the development of the economic situation on the market in several options with the obligatoryconsideration of crisis moments and ways out of them.

A mandatory condition is to consider possible risks, their assessment and ways out of them. For such information, a business plan usually contains a separate subsection. Each risk is considered separately with the assumption of the influence of external and internal factors. Any investor is interested in how the entrepreneur is going to protect his company from their impact. The volume of expected losses represents the threat of losing part of the resources. This is the perceived risk.