Learn why the financial section of the plan is so important, and get tips on what information to include. OVERVIEW [ top ] If you want to convince investors and lenders to commit to your vision and your company, a well-organized strategic business plan is a must. The financial section of that plan is critical to convincing investors that the company has reliably estimated its costs and revenue potential and that it offers a plausible asset and debt structure.
To them, the heart of your business plan is represented by the financial projections which must include income statements, balance sheets, and cash flow statements.
These statements must convince your backers of two very important details: Profit, or net income, represents the difference between revenues and expenses for the specified period.
An income statement presents the results of operations; that is, it reports, for a specific period of time, the items that comprise the total revenue and the total expense and the resulting net income.
Net income and net cash flow cash receipts less cash payments are different. For example, taking out a bank loan generates cash, but this cash is not revenue since no merchandise has been sold and no services have been provided.
Loan repayments consume cash, but do not reduce income - they are recorded as a reduction to liabilities. The cash flow statement accompanies the income statement and balance sheet to communicate to the user information about the inflows and outflows of cash.
We have examples of financial statements on our website which can be viewed on a large screen at TheBusinessPlanStore. The Business Plan Store will prepare detailed financial projections for your business that express your vision in terms of dollars and units of time, and in a format that is easily understandable to people in the lending industries.A housing development project for oil field workers was seeking a business plan to provide the lender that incorporated the sensitivity of oil price and adequately reflected multiple construction phases - Pro Business Plans build .
Regardless, short- and medium-term financial projections are a required part of your business plan if you want serious attention from investors. The financial section of your business plan should include a sales forecast, expenses budget, cash flow statement, balance sheet, and a profit and loss statement.
Home > Financial Projections > Links Between Financial Statements in a Business Plan Links Between Financial Statements in a Business Plan The financial projections template produces an income statement, balance sheet, and cash flow statement which at first glance appear to be separate independent statements.
The 3 financial statements change in presentation and format depending on the business involved, and the purpose of the 3 financial statements. A typical example of each for a quoted business is shown in the annual report for Apple in the links below.
Business Plan Financial Projections YOUR FINANCIAL BACKERS are interested in their investment.
To them, the heart of your business plan is represented by the financial projections which must include income statements, balance sheets, and cash flow statements. How To Prepare A Financial Forecast Introduction Below is a list of reasons of why it is important for you to have financial projections for your business.
In the example below, we will ask you to imagine that you plan to open a cupcake internet search you should be able to find the financial statements .