Entrep Financial Plan

Financial Plan

Helps entrepreneurs determine if their business is viable and has potential to succeed

Financial Plan

Forces the entrepreneur to carefully study all the costs involved in putting up his or her business

Financial Plan

It is an opportunity for the entrepreneur to do projections and estimates of how he or she thinks the company would perform once the product/service is already out in the market

Financial Plan

Created by gathering all the components of the business and expressing them in numbers – both revenue and startup expenses

Financial Plan

Every business plan needs a cash flow projection. The rest of the plan tells the story of the business and how the company will execute that plan.

Components of a Financial Plan

Sales Forecast, Expense Budget, Cash Flow Statement, Income Projections, Balance Sheet, Break-Even Analysis, Capital Investment

Sales Forecast

Usually set-up using a spreadsheet projecting your sales in a given amount of time. Standard practice is 3 years.

Expense Budget

How much it's going to cost you to actually make the sales you have forecasted

Cash Flow Statement

The statement that shows physical money moving in and out of the business

Income Statement

Pro forma profit and loss statement, detailing forecasts for your business.

Income Statement

Use the numbers that you put in your sales forecast, expense projections, and cash flow statement.

Balance Sheet

A statement of the financial position of a company that lists its assets, liabilities, and owner’s equity in a given period of time.

Break-Even Analysis

Analysis to help determine when your business's expenses match your sales or service volume

Capital Investment

How much money do you need until your business is up and running?

Capital Investment

The sum of funds that your company needs to achieve its goals

Capital Investment

Calculate the capital requirements by adding founding expenses, investments and start-up costs together

Income Statement, Cash Flow Statement, Balance Sheet

3 Financial Statements

Income Statement

Shows your Revenues, Expenses, and Profit for a particular period.

Income Statement

Snapshot of your business that shows whether or not your business is profitable at that point in time; Revenue - Expenses = Profit/Loss

Cash Flow Statement

Shows how cash is expected to flow in and out of your business

Cash Flow Statement

An important tool for cash flow management, letting you know when your expenditures are too high or when you might want to arrange short term investments to deal with a cash flow surplus

Cash Flow Statement

Will give you a much better idea of how much capital investment your business idea needs

Cash Flow Statement

Offers evidence that your business is a good credit risk and that there will be enough cash on hand to make your business a good candidate for a line of credit or short term loan

Balance Sheet

Presents a picture of your business' net worth at a particular point in time.

Balance Sheet

It summarizes all the financial data about your business, breaking that data into 3 categories; assets, liabilities, and equity