Small Business and Entrepreneurship
Business Plans

Does a business plan need to include financials?

979899

Top Answer
User Avatar
Wiki User
2007-12-26 22:33:05
2007-12-26 22:33:05

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.

1
๐Ÿ™
0
๐Ÿคจ
0
๐Ÿ˜ฎ
0
๐Ÿ˜‚
0

Related Questions

User Avatar

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.

User Avatar

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.

User Avatar

you need a plan of the business plan

User Avatar

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.

User Avatar

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.

User Avatar

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.

User Avatar

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.

User Avatar

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

User Avatar

decision making and budgeting

User Avatar

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

User Avatar

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.

User Avatar

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.

User Avatar

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.

User Avatar

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.

User Avatar

I need an e- business plan for any company

User Avatar

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.

User Avatar

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.

User Avatar

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.

User Avatar

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.

User Avatar

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.

User Avatar

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.

User Avatar

This is seo marketing.While many starting a new company know they need a business plan, often they... are a few more reasons why every business should prepare a business plan, ..

User Avatar

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.

User Avatar

For this you first of all need to know and plan what will be the turn over in your business for next three years. You need to note down the all nature of Expenses. Work out the kind of Profitablity expected. Look for the Risk involved in the Business, and plan to mitigate such risks. Then plan the Growth of the business and finally see when your business give an Return on Investment its phisibility. Hope this will work.

User Avatar

It is important to have a business plan. A well-managed business plan can usually understand the external and internal problems. It is necessary to include planning, target setting and performance monitoring from the outset, and adapt your management style as your business grows and develops.


Copyright ยฉ 2020 Multiply Media, LLC. All Rights Reserved. The material on this site can not be reproduced, distributed, transmitted, cached or otherwise used, except with prior written permission of Multiply.