The financial plan is often part of the business plan that scares entrepreneurs. Indeed, few of you have been asked to make a financial forecast and it's true that some seem a little intimidating at first first.
Rest assured with our business plan software and resources below you should do it quite easily. Before you jump headlong into the calculations, it may be helpful to take a step back in order to have a better understanding of the content and the financial issues.
What Is The Financial Plan?
The financial plan of the business plan aims to give an indication of the financial performance and future cash position of the company.
Nobody can predict the future accurately, the role of the financial plan is not to predict the future, but to quantify the most credible scenario based on the information discovered during the realization of your market research.
What Questions Should Respond Financially?
Your financial partners have specific expectations regarding the financial plan for your business plan. To better understand we recommend reading this article the issues facing the financial side of your business plan.
What Is The Content Of The Financial Plan?
The financial plan must contain at least the following projected financial statements for the next 3 years:
The projected income statement shows the profit or loss realized,
The forward estimate showing the financial situation of the company (debt, equity, and assets)
And cash flow forecast which shows the ability of the company to generate cash.
These forward-looking financial statements devont be accompanied by analysis and commentary retailers key assumptions used to establish them.
If you make your financial forecast as part of a business, a monthly version of these financial statements you will usually be required for the first year.
How To Make A Financial Forecast?
Achieving financial forecast includes 4 large steps we have detailed below:
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