SmallBusinessNewz

The Financial Plan of your Business Plan is a very important section. It is placed second to the last because it is made of data from the sections. Before you write this section, you should sit down with your accountant, financial advisor, or CFO and outline the financial structure of your business.

As explained in the above video, the Financial Plan should inform potential investors on everything from startup costs to day-to-day expenses. Specifically, include the following information:

1. Funds required to start your business
2. The anticipated funding for the next 5 years
3. Use of funding
4. A timeline for the funding

As stated earlier, the other sections of your Business Plan play a critical role in your Financial Plan. If your research is incorrect in your other sections and you use it to estimate your funding in your Financial Plan, then your Financial Plan will be wrong too. For example, if you overestimate your potential customer base, then your projected sales figure will be inaccurate.

The Financial Plan should not only contain numbers and projections, but it also needs to explain your process of obtaining that data. Be clear on expenses such as salaries, wages, insurance costs, equipment costs, legal fees, taxes, and more. Also refer to financial documents such as the Break-Even Analysis, Balance Sheet, Projected Profit and Loss Statement, and Projected Cash Flow Statement, but include them in your Appendix.

Your Financial Plan contains a lot of information but should not be difficult if the other sections of your Business Plan have been carefully researched and written.

Be sure to check back next week as we wrap up our series on Business Plans with Projections.