Financial Business Plan

How to Prepare a Financial Business Plan

As part of your financial business plan, you will need to provide a set of financial projections, which will enhance your overall business plan.

This should translate what you've said about your business, into numbers.

What Factors Do You Need To Include ?

You will need to look carefully at:

How much capital you need if you are seeking external funding. The security you can offer lenders.

How you plan to repay any borrowings.

Sources of revenue and income.

You may also want to include your personal finances as part of the plan at this stage.

Financial Planning

Your forecasts should run for the next three (or even five) years, and their level of sophistication should reflect the sophistication of your business.

However, the first 12 months' forecasts should have the most detail associated with them.

Include the assumptions behind your projection with your figures, both in terms of costs and revenues, so investors can clearly see the thinking behind the numbers.

What your forecasts should include:

1. Cashflow statements
- your cash balance and monthly cashflow patterns for at least the first 12 to 18 months.

The aim is to show that your business will have enough working capital to survive so make sure you have considered the key factors such as the timing of sales and salaries.

2. Profit and loss forecast
- a statement of the trading position of the business: the level of profit you expect to make, given your projected sales and the costs of providing goods and services and your overheads.

3. Sales forecast
- the amount of money you expect to raise from sales.

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