Financial plan

Financial plan is an important part of the business plan that determines economic feasibility and
necessary financial investment commitment. One type of financing needs is to be considered.
Equity Financing:
Equity financing does not require collateral and offers the investor some form of ownership
position in the business. So in “Green Grocer” there will be a total investment of Rs 1200000 by
the three partners. Three partners will contribute equal amount in the business i.e.Rs 400000
.Similarly, there will be a ratio of profit equally divided in partners.
Parts of Financial Statements:
Financial statements include the following parts:
1. First-month start-up costs
2. Income statement
3. Pro Forma Income Statement
4. Balance sheet
1. First month start-up cost:
Cost of inventory (vegetables) and other costs which are incurred for starting the business and
marketing expenses and day to day operating expenses are estimated in first month start-up cost.

Income:
The income which we earn from our operation of the business can be through these sources.

 Sale on order
 Sale through hawkers
 Sale through retailing
 Sale through cut vegetables

2. Income Statement
Income statement tells about the profit and loss of the business. All the revenues and expenses
are included in the income statement. The nature of these revenues and expenses are fixed as
well as variable. For this venture income statement has been made for the one month. Revenues
related to the sale of vegetables have been included in this statement.
In income statement expenses are related the salaries as well as the day-to-day operations of the
venture. There will be expense on the marketing through broachers including the cost of printing
of broachers, questionnaire etc. The cost will be incurred on distributing broachers in the “buch
villas ,wapda town phase ,shalimar and zakriya colony”. There will be an advertisement of this
venture on cable media and newspapers in the coming months. So in the beginning of this
venture there will be a huge amount of the expenses as compare to revenues because the business
will be started from the scratch.
3. Pro-forma income statement (in annexure)

In pro-forma income statement in first month there is no as much sale because of

starting the venture and people are habitual to buying from competitors, so some time is
required to change this habit of people.
4. Balance Sheet
Balance sheet tells about the financial position of the company. To start this venture Rs.
150000,0 have been invested by the three partners. In the start different assets have been
purchased that would be helpful in order to generate the revenues in future. For day-to-day
operations some cash will be kept in hand. In first month there are no long and short term
liabilities because by the mutual concern all partners are agree to starting pay back the loan
which is lend by parents.

Break Even Analysis:

Break even analysis tells the stage of the business at which business is bearing no lose and earn
no profit. In our venture “Green Grocer” we have loss in first month because our operating
expenses are very high and G.P is very low. We do not hiring may employees to do work but
only four employees excluding management are enough to do work inside and out side of the
store. After five months we start to earn profit and bear our expenses. We can find break even
point through this formula.

Total fix cost

Break Even = Sale price – Variable cost /unit

Risk in the Venture:

The risks in this venture are, firstly and the most important is that to create the customers trust
because the cut vegetables and simply on order delivery services are introducing first time in the
area by “Green Grocer”. So the re is most important point is to keep in mind the human health. It
is a risk may people do not believe on our safety steps, so we are very much conscious about our
customer’s health and care it by neat & clean uniform of employees, gloves & cap, and washed
vegetables. Second risk is about the natural evils e.g. flood, lack of rain etc may be due to these
evils the prices of vegetables rise and profit margin may decrease. Third risk is from competitors
because there is direct competition with local shops and the one hawker who is already serving
this area. But “Green Grocer” is providing the unique services i.e. washed and cut vegetables, on
order delivery, hawkers of “Green Grocer” are selling vegetables in the whole day because
people of this area are buying in whole day.