Professional Documents
Culture Documents
business
planning and
financial
forecasting
This document has been developed for the Internet by the Ministry of Competition,
Science and Enterprise, Province of British Columbia and Western Economic
Diversification, Federal Government of Canada.
and Investors 19
Bank Financing 19
Appendices 23
This publication is part of the Solutions for Diversification and the Ministry of
Small Business series sponsored by Western Competition, Science and Enterprise. The
Economic Diversification and the British program offers specialists who can advise on
information about small business programs Vancouver and Victoria as well as outreach
and services is available on each agency’s web centres throughout the province in the offices
1
You should do a business plan for a
number of important reasons. Some of
those reasons include:
Where is the customer? Target the geographic radius of The geography of business to
your customer base by city, business markets tends to be
region province or country. larger than consumer markets.
When do they buy? Is there a particularly busy If you are selling to seasonal
season for your product or service businesses, the timing can be
i.e. Christmas? everything i.e. wholesaling.
Why do they buy? How does your product or service How does your product enhance
help the consumer? the performance of
this business?
How much do they buy? Determine how much is spent on Estimate the commercial
your product by your customers. expenditure by the industries
in your target area.
Note: If you are using indirect distribution, it may be necessary to describe both your customer as a
target market, and the end user as a target market.
• Provide the results of any customer survey work you have done
• Provide the sources of information for any of the above
2
determine the break-even for the business.
They are:
(Price – Cost)
= Gross Margin
Price
There are industry standard financial ratios
available from Statistics Canada for many
small businesses. These ratios include the gross
profit margin, expressed as a percent of sales.
Assets Liabilities
Total Capital Assets $ 27,000 Total Liabilities & Owners Equity $ 56,000
The Overheads Forecast You should make a brief note to the reader of
The overheads forecast is an estimate of your the plan, describing the key expense forecasted
expenses for the year. This list should be items. (i.e. you may have a quote from a
similar to the list developed for the fixed costs broker for your insurance projection.) This is
of your break-even analysis. Typical overhead especially true if, in an existing business, there
expenses include: is a large change in the statement.
Capital Assets
Book Value (Vehicle) $ 15,000 $ 15,000
Book Value Equipment $ 12,000 $ 5,000 $ 17,000
Total Capital Assets $ 27,000 $ 32,000
Liabilities
Current Liabilities
Trade Payables $ 2,000 $ 2,000
Wages Payable $ 3,000 $ 3,000
Line of Credit $ 4,000 $ 4,000
Total Current Liabilities $ 9,000 $ 9,000
Equity
Owner’s Equity $ 31,000 $ 1,000 $ 32,000
Total Liabilities & Owner’s Equity $ 56,000 $ 60,000
The program and financing and the statements of personal net worth must be provided along with the
business plan to ensure the creditworthy nature of the business venture.
This publication is part of the Solutions for Small Business series sponsored by Western
Economic Diversification and the B.C. Ministry of Competition, Science and Enterprise.
Both agencies are committed to supporting the needs of small businesses and further
information about small business programs and services is available on each agency's
web site (www.wd.gc.ca and www.gov.bc.ca/cse/).
The Solutions series is also available on both web sites as well as on the web site of
Canada-B.C. Business Services (www.smallbusinessbc.ca). The other titles in the series are: