Drawing up the financial section of a business plan

Previous Steps of Starting Your Own Business Guide

We continue the process of business planning for the Entrepreneur-Pro, that is, drawing up a business plan. Now is the perfect time to get into finance as part of your business plan.

It's the turn to deal with money.

Finance is the most important part of a business plan

The financial section of the business plan comes in last place simply because in this section we will use almost everything that we have planned and analyzed in the previous sections. The financial part of the business plan should show us whether our business idea is financially viable or not, and whether it is worth starting this business. We planned and considered a lot of things, including how to produce, how to sell, how much money to set aside for salaries, etc. But now we have to check if these plans are sustainable or not.

What should the financial section of a business plan include?

Financial Plan Brief

As always, the summary is written at the end (after other parts of the financial plan) and covers the most important features of the financial plan. Keep in mind that if you plan to use a business plan to raise funds from an investor, then this section may become the most readable part of the business plan, as it briefly describes the main financial indicators. And this is the main thing that interests any investor.

Funding Sources

All sources of funding for starting a business are described here. In this part of the table, you just need to indicate which finances you will invest, which ones to borrow from relatives and friends, how much loans you need from banks, etc. Please provide a short explanation.

Components of the financial section of a business plan

Previous Steps of the Guide to Starting Your Own Business

We continue the process of business planning for the Entrepreneur-Pro, that is, drawing up a business plan. Now is the perfect time to get into finance as part of your business plan.

It's the turn to deal with money.

Finance is the most important part of a business plan

The financial section of the business plan comes in last place simply because in this section we will use almost everything that we have planned and analyzed in the previous sections. The financial part of the business plan should show us whether our business idea is financially viable or not, and whether it is worth starting this business. We planned and considered a lot of things, including how to produce, how to sell, how much money to set aside for salaries, etc. But now we have to check if these plans are sustainable or not.

What should the financial section of a business plan include?

Financial Plan Brief

As always, the summary is written at the end (after other parts of the financial plan) and covers the most important features of the financial plan. Keep in mind that if you plan to use a business plan to raise funds from an investor, then this section may become the most readable part of the business plan, as it briefly describes the main financial indicators. And this is the main thing that interests any investor.

Funding Sources

All sources of funding for starting a business are described here. In this part of the table, you just need to indicate which finances you will invest, which ones to borrow from relatives and friends, how much loans you need from banks, etc. Please provide a short explanation.

Previous steps of the guide to starting your own business We continue the process of business planning for the Entrepreneur-Pro, that is, drawing up a business plan. Now is the perfect time to get into finance as part of your business plan. It's time to have ...

And the financial section of the business plan of the enterprise is a forecast of what financial results due to the introduction of new developments should be expected in the next three to five years. The financial section of a business plan includes several mandatory points, we will consider each point in more detail.

How to write a business plan for an individual entrepreneur - instructions for self-writing. Cross-link block. Why do you need a business plan at all? Section # 5: Organizational plan; What parts should be in the business plan? Section # 6: Risk analysis; Section # 1: Writing a summary for the plan; Section # 7: Ways to reduce risks; Section # 2: Description company and services; Drawing up a financial section of a business plan; Section # 3: Drawing up a marketing plan; Additions and annexes to the plan; Section # 4: Production plan of the company; Determining the effectiveness of a business plan.

Regulations

Standards are determined with the help of which economic calculations and financial indicators will be made.

  • Price indicators for calculations are determined. Based on the current prices for goods and services of the firm, a forecast is made for the future, depending on the possible inflation. Prices are determined that are likely to be constant throughout the entire duration of the project, or comparable in relation to certain factors. Prices are considered both including VAT and excluding.
  • The amount, types and terms of payment of taxes, which the company already pays and will pay, are determined.
  • The periods for which the forecast is made are determined, usually the period is determined in three years. Financial calculations of the first year are monthly, and quarterly for the next two years.
  • Calculate inflation rates, current and planned. Consider the inflation rates for the past period, usually take three years and form the planned inflation rate, and this forecast is applied to a possible increase in prices for goods produced by the company and raw materials, consumed resources and materials.

Project work costs

Variable costs are calculated separately for each product or service item produced by the enterprise. Costs depend on changes in production volumes.

Fixed costs are production expenses that the company makes monthly or quarterly, regardless of the volume of production. These are the costs of advertising, the maintenance of equipment and production facilities, and the cost of maintaining the management apparatus. The wage fund is calculated depending on production plans and production volumes

Development of the financial section of the business plan includes a general estimate of project costs and calculation of production costs.

The project cost estimate includes the investment amount. Analysis of the estimate makes it possible to determine the coefficient of economic efficiency of investments. Production costs for the entire period of project implementation are calculated based on the planned volumes, and are also an investment. Investment investments consist of loans taken by the enterprise for the implementation of the project and investments of investors interested in the success of the enterprise. The estimate is constantly being changed as the project progresses.

The cost of production includes all direct production costs. These are labor costs and overhead costs, depreciation and direct material costs. The cost is calculated based on the planned production volumes during the project.

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