Financial plan in a business plan: sample and example calculations
Continuing to learn how to independently draw up a business plan, we move on to the next stage of project description. The production plan in business planning is an integral part of any document. If almost all the previous sections were essentially more a description of theoretical information, then this whole is devoted to practical "calculations" - production capacities and resources, which include: raw materials, personnel, premises, equipment used, equipment, inventory, and even intangible assets - information and production technology.
What is a production plan for in a business project description? And is it needed in a business plan, which is not drawn up for production, but, say, for the provision of any services? Of course you do! The production plan of an enterprise, regardless of its type of activity, shows which specific processes are required to produce the proposed product or provide a service.
The description of the technological process should show a potential investor, or prove to you personally, that the company is able to provide an output to the planned volumes of products (services) of proper quality in a timely manner, given the availability of certain capacities.
The production plan, when drawing up, should be based on the data of the sales plan of manufactured products, it should reflect all stages of the manufacture of goods or the provision of the proposed service. For greater clarity and better perception, the content of the plan should include a calendar containing a listing of the activities necessary for the implementation of the document, the conditions and deadlines for their implementation, as well as the financing of each stage separately.
All production processes should be presented step by step, with maximum detail, starting from the moment of finding a suitable premises and purchasing consumables until the purchaser makes a purchase. It is better if all stages of the production system are accompanied by schemes and work algorithms. On the diagram, it looks like this:
However, you can save the investor from reading the list of everything necessary (for example: 34 spoons, 35 forks, or 3 packs of printing paper and 15 pens - funny, isn't it?), and touch on this topic only superficially ... If such data are really of particular importance for the implementation of the project, then they can be taken out in the Appendices to the business plan. I will tell you about them in one of the following topics.
But identifying and listing the required resources is not enough. You also need to convincingly argue why you chose them, and not other similar ones. Quite often, specialists from industry companies involved in project development are involved in the work on drawing up a production plan. Only professionals will be able to explain in an accessible way all the advantages of the facilities planned for use, and show the effectiveness of their work. back to contents ↑
Classification of production plans
When describing a project to an investor, do not forget about yourself - after all, your main goal, along with obtaining financial resources, is to understand the whole process "from the inside" in order to facilitate your work on its implementation.
Having determined the type of planning for yourself, you must enter the following tactical information in this section of the document:
- Aggregate (general) plan. This is a general description of the production of all goods or services offered by an enterprise.
- The main schedule of work performed, in which you must show the calculations of the number of units of goods or the number of services provided for a certain period of time.
- Needs plan. Here you must show what consumables, in what quantity and in what time frame you will need in order to comply with the main schedule of the work performed.
Let's look at an example right away:
The financial section of a business plan is a necessary set of documentation for organizing and a detailed analysis of aspects of the company's activities. As the main indicators of the assessment, the current monetary summary of the data is used, as well as the determination of the sales prospects (sales volumes) in the market of goods and services.
Purpose of the financial plan in the business plan
The structure, content and goals of a financial plan in a business plan directly depends on the company for which it is being drawn up and the audience to which it will be presented. The documentation that will be used by the organization's employees to manage and promote the company's product should contain detailed summaries of the potential sources of finance and internal cash flows. But the financial section of the business plan, which will be presented to investors and customers (that is, for external use and partial marketing of the enterprise), will mainly consist of liquidity estimates, a positive analysis of solvency, profitability and other markers that will prove profitability and monetary security.
What a financial business planning plan should contain
In order to achieve the set goals of financial business planning, namely, raising money or forming tasks for the prospects and development of the company, it must contain the following points:
defining the procedure and methods for obtaining the maximum net profit from activities in the existing conditions of operating finance and the functioning of the company itself;
optimization of income and expenses, as well as other ways of investing capital to ensure and confirm the financial stability of the enterprise;
proof of financial solvency and security of the project to confirm credit independence and profitability;
creating a correct and effective cash flow management mechanism. It can include these types of policies:
When developing the financial part of a business plan aimed at foreign investors, the following features of the preparation of documentation should be taken into account:
mandatory inclusion of analysis and reporting of profit and loss for the last accounting period (the choice of time frame remains with the author of the business plan, but most often the indicators for the previous quarter, six months or a year are taken);
statement of the current amount of the organization's capital balance;
estimated sources of income and expenses, that is, the immediate financial plan.
A business plan as a document consists of several mandatory sections. One of them is an organizational plan. It describes the structure of the company, provides the mode of operation, staffing, rules for the formation of wages and other information. An example and rules for drafting such a document are described below.
What is an organizational plan
This is the section of the business plan that provides information like this:
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- organizational and legal form of the enterprise;
- company structure;
- partners with whom the business will be conducted;
- personnel assessment (qualitative and quantitative);
- conditions for attracting employees (in the state, part-time employees);
- formation rules wages;
- terms of project implementation.
For convenience, information is displayed in the form of tables or diagrams. For example, when describing the organizational structure of a company, you can make a list of employees in accordance with the chain of command:
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- Deputy Director.
- Head of department.
- Deputy head of department.
- Chief Accountant.
- Manager, accountant.
Organizational plan structure
The organizational plan in the business plan consists of several sections:
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- The organizational and legal form of the company - it can be an individual entrepreneur, LLC, partnership and others.
- Organizational structure - the composition of the enterprise (departments, divisions, branches, representative offices). It also indicates the subordination, the relationship between these elements, the scope and regions of their responsibility.
- Management structure - for example, board of directors, director and deputy, sole sole proprietor.
- Description of the staff of all employees with an indication of the position, the number of employees in this position, monthly and annual salaries of each employee.
- Opening schedule, terms of project implementation, main activities at each stage.
Sample Organizational Plan
The section containing the calculations of the main economic indicators in the business plan is decisive, this is the main criterion for determining the feasibility of creating a project.
All parts of the business plan are reduced to the financial part, and the profitability of the business depends on how well the mistakes are made in the project.
Contents of this article:
When making a financial model of a future business, it is important to take into account not only future economic benefits, but also make a forecast of costs, including unplanned ones.
Providing competently all the calculations in the financial section of the business plan, you can immediately determine the profitability of the project and prevent losses. Let's try to figure out what indicators should be taken into account when drawing up a financial plan.
Content of the financial part of the business plan
A financial plan as an integral part of a business plan is fundamental when planning a business. All calculations must be done very carefully.
The financial part consists of the following sub-items:
- forecast of the main indicators of financial activity;
- planning of cash flows;
- forecast of the company's balance sheet.
Important: the planning of key indicators is done for 5 years of the company's activity, while it is very important to take into account the costs of starting a business.
Forecast of the main indicators of financial performance
The production business plan is the main structural section of the documentation about the enterprise, which includes many aspects of the activities and work of the firm, plant or organization.
Features of drawing up the production section of the business plan
The production section of the business plan is the main part that considers the following aspects of the organization and production:
premises operated for different purposes;
location of the main facilities of the enterprise;
transport and logistics issues;
organization of staff work;
service delivery system;
control over production processes at all stages.
Attention! The production section of the business plan is necessary to attract subcontractors, as well as to justify the choice and application of certain production tools.
Sales planning of products or services can be taken as the key element on which the entire subsequent documentation strategy will be based. In this case, you will need a detailed description of all production stages of manufacturing and preparing the product for release on the market with a clear indication of the timing and time that will be required to carry out a particular procedure. The example given at the end of the article will help to make the correct production plan in the business plan.