answersLogoWhite

0


Best Answer

As a rule of thumb, you should always include financials as part of a complete business plan package. Financial components are a must when creating a business plan that is going to be presented to bankers or investors. They need to evaluate your financial projections to see whether or not your business is going to be profitable. They want to make money and are not going to invest in a business or loan any funds without seeing the bottom line - and all the numbers in between. Even if the plan is for internal uses, it should still contain financial projections. Everyone that looks at a business plan expects to see financials. At the very least, you should include a cash flow statement, income statement and balance sheet. Before preparing your financials, you should consult with an accountant, financial advisor or other finance professional to review the financial structure of your business. Do things add up and make sense? Has everything bee properly accounted for? Assumptions are okay, as long as they coincide with industry averages and competitive benchmarks. No one expects you to hit a line drive, but you better be somewhere in the ballpark. Remember to stick with generally accepted accounting rules - don't get too creative. If you have all the financing you need then no, financials are not necessary. If however you want to borrow money or get investors interested then financials are not only necessary, they may be the most important part. Having done M&A work for a Fortune 100 company I can tell you that a properly constructed set of financials can often tell an investor everything he needs to know after he has read the executive summary. Accepting my finance background bias, a business plan without financials is just a fairy tale! YES! ABSOLUTELY! Profits and positive cash flow are the rewards for your efforts as an entrepreneur. That is what you work for. And the financial projections in your business plan tell you whether you expect to earn enough to make it worth your while. Your business plan is also the road map you use to make your business work. It describes why and how you think that your business is going to be successful. Why else would you make a business plan? After the planning comes the execution of the plan. This is the proof of the pudding. And what better way to determine whether the pudding you planned tastes good than via the profits you make. So you need to check during the execution of your plan whether your plan was a good plan or needs to be adjusted. Why would you adjust your plan? Because profits are not in line with what you want. You know that profits are not in line with what you want by comparing actual profits with your planned profits. You can only make that comparison if you have made those financial projections when you wrote your business plan. That is why you absolutely need to include financial projections in your business plan. If you have trouble preparing those projections ask your accountant or a financial expert for help. But make those projections and include them in your business plan so you can determine whether you are on course to the profits you need or need to adjust your business plan.

User Avatar

Wiki User

โˆ™ 2007-12-26 22:33:05
This answer is:
๐Ÿ™
0
๐Ÿคจ
0
๐Ÿ˜ฎ
0
User Avatar
Study guides
๐Ÿ““
See all Study Guides
โœ๏ธ
Create a Study Guide

Add your answer:

Earn +20 pts
Q: Does a business plan need to include financials?
Write your answer...
Submit
Related questions

Do you include your small business grant in your business plan?

If you are receiving a small business grant it is best to include it in your business plan. If you include it in your plan you are able to show a better profit/loss statement.


How is a marketing plan different from a business plan?

Marketing plan is a subsection of a business plan and it contains the strategy, research and any other information relevant to marketing. A business plan is a complete overview of a business that includes the mission, values, products/services, financials, marketing, action plan and any other measures that can help evaluating th success of the business as a whole.


Is a business plan required to purchase an existing business?

Yes, a business plan is required to buy an existing business - especially if you will be seeking financing. The current owners may already have a business plan, but this is not your plan. Your plan needs to take into consideration the transition that will occur as the business changes hands. For instance, if you are purchasing a retail business that has a steady flow of customers, how will the transfer take place without disrupting normal business activities? The plan also needs to detail any changes that you intend to make to the business model, pricing and marketing. It should also include an updated personnel plan and financials.


What do you need to be a business owner?

you need a plan of the business plan


How can one start a small IT business?

One can start a small IT business with an idea. From that idea, one must define his or her goals for the IT business. A business plan is required, which includes financials, competitive analysis, and marketing strategies.


How can you find a good business plan for an online florist?

Bplans.com provides a host of business plans for businesses, including florists. They include every aspect of the business plan you will need to get started. You only have to do the research for your market.


How do you use business plan in a sentence?

I need to write a business plan to show the bank how the business will operate.


How should you make strategic plan for your business?

you need to make a thorough plan of actions and state them so that everyone understands it better. The plan should be clear and time related. It will include any business actions that are needed to make the business more forward.


Why would you need a business plan while expanding?

I need a template so that I may be guided when I am writing my business plan


What does a business plan include?

decision making and budgeting


What is the difference between a simple and complex business plan?

There are a few differences between a simple and a complex business plan. A simple business plan may only list some business goals and guidelines, while a complex business plan might include marketing and employment plans. Additionally, a simple business plan is usually used by small business with limited employees. Complex business plans are tailored to larger corporations which need models for growth, profit, employment, advertising, and many other details.


Should you have an accountant prepare the financials for your business plan?

If you are uneasy about constructing the financial plan for your business, your best option is to seek the assistance of a professional such as an accountant, bookkeeper or an attorney. Just make sure that you provide them with all necessary information such as start-up expenses, personnel needs, inventory, etc. When they have finished the financial plan, sit down with them and go over it. You need to have an understanding of how and why the numbers appear as they are.


E-business plan for any company?

I need an e- business plan for any company


Do you put appendices in a business plan?

It is an option, but you have to make sure that they are relevant and you don't include them just for the sake of having them in your business plan.


What to include in a business plan?

A business plan is at its heart an argument that a "hunch/idea" can perform/create such effects with an understanding of the factors involved.


What does a business plan look like?

Most often business plan looks like a mini book that holds the mission statement, profit goals, and marketing ideas of a business. The plan will include how the owners plan to organize the business, as well as the plans for success.


What are the necessary components of a business plan?

There are different components of a business plan. This include content and market research for the product. There should also be cost analysis involved in the plan.


How do you write a business plan as an Insurance agent?

To write a business plan as an insurance agent you should include the executive summary, marketing plan and the key employees. You have to focus on your niche and write about how your business will be successful.


How can i plan a business?

The first step to planning a business is to do some research. Once you have thoroughly researched the type of business that you want to start, you will have to come up with a business plan. The business plan should include as much about your business as possible, this includes where you will get financing, if you will have partners, and even the name of your business.


How can i find a good business plan template?

There is no single formula for developing a business plan, but some elements are consistent throughout all business plans. Your plan should include an executive summary, a description of the business, a plan for how you will market and manage your business, financial projections and the appropriate supporting documents.


How do you write a business plan for a hospital?

The best way to write a business plan for a hospital is to start by doing research. Business plans should include an executive summary, marketing plan and critical financial information.


What are examples of business plan?

The type of business plan you need depends on the type of business you are doing the plan for. In general you need to provide as much information as possible regarding projected expenditure, income & capital expenditure. There are numerous web sites that provide templates for the sort of business plan needed.


What is a business plan on fish farming?

Fish farming aquaculture is the business of raising fish for commercial food supply. A business plan on fish farming should include all areas of the business planned.


What is needed before creating a business plan?

Before you create a business plan, you need an objective this can be anything but a goal where you know what you want to achieve, after that you need to know the audience that will buy or use your product this is very important as to the prices and structure of your business plan


Using Examples To Write Your Business Plan?

Coming up with a business plan for your company can be tricky, but you should be able to do it on your own. One way to get a better idea of how to do your business plan is to take a look at a good business plan sample to get a better idea of what you need to do.