Whether you're a big multinational or a one-person shop, your company needs a business plan. It’s a working roadmap that will help you obtain credit from vendors, future funding or investment capital. It describes your overall goals and objectives and how you conduct daily operations.
Financials is a Critical Section of your Business Plan
Perhaps the most critical section of your business plan is its financials. You might have the finest products, but if your financial planning isn’t well-researched and on target, your company’s future could be in question. Your financial plan explains what resources you expect to have and how you expect to allocate them in running your business. It should address your current situation, ongoing operational needs and future growth, and be consistent with your overall business plan.
Specifics of the Financial Section
- Money needed for startup or short-term growth
- Amount needed over the next few years for ongoing operations and growth
- Expected fund allocation
- Expected new funding needs and timeframe
These projections are based on the same financials you regularly use to evaluate your business. Because startups have no history, you’ll need especially thorough research, careful market analysis and strong marketing and operations plans to make accurate predictions.
Elements to Include in the Financial Section
- Cash flow statement
- Profit and loss statement
- Balance sheet
- Overall revenue
- Break-even analysis
- Business ratios
- Operations costs
Prepare the financial section of your business plan last. That way, you’ll have all of the information you'll need – along with your overall goals and objectives – to formulate sound projections.
Having a strategic business plan is important, but it must be implemented effectively. Partnering with a sales advisory firm can provide you with an immediate, targeted and top-notch team of experts, so you’ll be up and running quickly.
Editor's Note: This post was originally published in August 2011 and has been updated for accuracy and relevancy.