The Financial Plan: The Linchpin of Your Business Plan
Financial issues are the most important part of the business plan, and they are written at the end of the plan. Everything written in a business plan is of importance, but financial issues must be written quite accurately, reasonably, and systematically. Financial order and sense are the business plan's linchpin, and if you haven't thought of this section, you are unable to proceed.
Investors assess the business's potential based on actual evaluations and statistics. Costs and incomes are the main issues for them, so you can't write expenses and incomes carelessly. In order of precedence, the most important financial factors are determining capital, expenses, and incomes.
Think of the following items and write their answers: How much money and capital do you have? How much capital do you need to start your targeted business? Through which methods are you going to secure the capital? Are you going to secure the entire capital or a part of it by yourself? Are you going to use savings accounts, borrow money, or sell properties? For example, you define that you have 50% of the capital, you intend to take out a loan for 30%, and the rest will be prepared by other sources.
How much is your business's liquidity? Its annual cost? Its operating income? Your income and profit? What resources can you use to earn extra, non-operating income? For example, make use of the space at your disposal for advertisement. How is the schedule of expenses and incomes? It's better to define this in shorter and more precise periods. If you are unable to define a monthly plan, determine the financial plan for one, two, three, and up to five-year periods.
At least for the first year, estimate your business's status and forecast how you can work with the available capital, and predict where you will end up at the end of the first year.