Tips To ensure that all of the financial statements have been prepared correctly, have them looked over by an accountant. Personnel Plan If your business will have employees and not just managers, you will need a Personnel Plan showing what types of employees you will have for example, cashiers, butchers, drivers, stockers and cooksalong with what they will cost in terms of salary and wages, health insuranceretirement-plan contributionsworkers compensation insuranceunemployment insuranceand Social Security and Medicare taxes.
Sales Forecast The Sales Forecast is a Financial plan write up that breaks down how much your business expects to sell in various categories by month for the next year and by year for the following two to four years. In business plans, three-year and five-year projections are considered long term, and your plan will be expected to cover at least three years.
The plan should include a strategy for achieving retirement independent of other financial priorities. Prepare a balance sheet. The sections about your marketing plan and strategy are interesting to read, but they don't mean a thing if you can't justify your business with good figures on the bottom line.
This is a summary of your business from its start to the present. Then lay out your goals with financial projections for the next three to five years, depending on what lenders or investors have asked for. If your business sells a product, your sales forecast should include the cost of goods sold.
Review and update estate panning instruments, such as wills, inter-vivos trusts, power of attorney, medical directives, and marital trusts.
Structuring Your Financial Plan Begin your financial plan with information on where your firm stands financially at the end of the most recent quarter what its financial situation has looked like historically.
If there is an excess of funds after the liabilities have been subtracted from the assets, the business is financially healthy. The plan should include a strategy for accumulating the required retirement capital and its planned lifetime distribution.
Be aware that lenders do not count the full value of your collateral, and each lender may count a different percentage.
Whatever their form, financial statements must be complete, accurate and thorough. In estimating the growth of your business, you will make certain assumptions, which should be based on thorough industry research combined with a strategy for how you'll compete.
A bank, for example, may want to see monthly projections for the first year, quarterly projections for the second year and annual projections for the third year. Many people get confused about this because the financial projections that you include--profit and loss, balance sheet, and cash flow--look similar to accounting statements your business generates.
Also describe what collateral is available to secure the loan, such as inventory, accounts receivable, real estate, vehicles or equipment. So how, exactly, do you plan to use any money that lenders or investors offer you?
Your financial statements should show both a long- and short-term vision for your business. For example, what you see in the cash-flow plan might mean going back to change estimates for sales and expenses. Business planning or forecasting is a forward-looking view, starting today and going into the future.
It's called a balance sheet because the assets must perfectly balance the liabilities. Warning Do not forget to include a salary for yourself in the financial plan.
If you're selling business units, state the individual price per unit. If your business is new, your statements will be speculative, but you can make them realistic by basing them on the published financial statements of existing businesses similar to yours.
Even if you and all of your business partners know exactly what you are doing, you may still want to hire an unbiased, outside professional to check your work and give you a second opinion on whether your projections are realistic. Proposed Repayment Schedule or Exit Strategy Potential lenders will want to know how and when you intend to repay the loan or line of credit, so you should put together a proposed repayment schedule and terms.
Use the numbers that you put in your sales forecast, expense projections, and cash flow statement.
Realize that the financial section is not the same as accounting. Your income statement must reconcile to your cash flow statement, which reconciles to your balance sheet.
Three Key Financial Statements Your financial plan should include three key financial statements: Also, analyze how quickly you'll achieve positive cash flow. Your one-year projections should be broken down by month, while your more distant projections can be broken down by year.
A lot are not obvious. Structuring Your Financial Plan Begin your financial plan with information on where your firm stands financially at the end of the most recent quarter what its financial situation has looked like historically. In order for your projections to be accurate, you must know your business.
So how, exactly, do you plan to use any money that lenders or investors offer you? Prepare your income statement. Prepare a summary of your financial needs. Berry likes to differentiate between fixed costs i. He says multiply estimated profits times your best-guess tax percentage rate to estimate taxes.
You should be utilizing your financial statements to measure your business against what you did in prior years or to measure your business against another business like yours.The financial part of a business plan includes various financial statements that show where your company currently is financially, and where it intends to be.
financial plan regularly to ensure it is up-to-date and addresses your current needs. It is also important to look at a few different scenarios to get an idea of the impact of various assumptions on your planning objectives.
Use graphs and charts in the financial analysis section to illustrate the financial data, just as you should in other sections of your business plan that include extensive data, numbers, statistics and trends.
Put the most important visuals in the financial analysis, with the supporting graphics included in the Appendix.
A financial plan is a comprehensive evaluation of an investor's current and future financial state by using currently known variables to predict future cash flows, asset values and withdrawal plans. We expect to raise $90, for start up capital between our 3 partners and to take out an SBA 7(a) loan of 30, The interest rate on this loan is prime (currently at %) plus % for loans under $, with a note of 7 years or less.
Personal Financial Plan John & Mary Sample December 11, This report, and its hypothetical illustrations, are intended to form a basis for further discussion with your legal, accounting, and financial .Download