Writing the Business Plan:
Part 1: The Financial Plan Section of the Business Plan
It's at the end of your business plan, but the financial plan section is thesection that determines whether or not your business idea is viable, and is a keycomponent in determining whether or not your business plan is going to be ableto attract any investment in your business idea.
Basically, the financial plan section of the business plan consists of three financialstatements:
the income statement, the ca sh flow projection and thebalance sheet and a brief explanation/analysis of these threestatements.
This article will lead you through the preparation of each of these three financialstatements on the following pages. First, however, you need to gather together someof the financial data you'll need to prepare these financial statements for yourbusiness plan by examining your expenses.Think of your business expenses as broken into two categories; your start upexpenses and your operating expenses.All the costs of getting your business up and running go into the start up expensescategory.These expenses may include:
business registration feesbusiness licensing and permitsstarting inventoryrent deposits< /SPAN>down payments on propertydown payments on equipmentutility set up fees
This is just a sampling of start up expenses; your own list will probably expand as soonas you start writing them down.Operating expenses are the costs of keeping your business running. Think of these asthe things you're going to have to pay each month. Your list of operating expensesmay include:
salaries (yours and staff salaries)rent or mortgage paymentstelecommunicationsutilitiesraw materialsstoragedistributionpromotionloan paymentsoffice suppliesmaintenance