Saturday, April 30, 2011
Financing needs of a Business Plan
The purpose of this part is essential to determine the amount of different funding requirements deemed necessary to ensure the successful completion of the project.
- Need to block funding
- Amount of funds sought
- Return on Investment
Financial documents (see below)
Financial documents in this section should show all the various assumptions and choices made in the development plan (market share, industry growth, costs, investments, sales, etc..), Without revealing to inconsistency.
Output modes investors
Are taken into account by investors as capital gains may be realized by the investor and the liquidity of the investment.
Shared vision and shared the business plan over several years (3 minimum), the synthesis is to transform the information collected and presented in numerical predictions articulated for each period:
- Income statement,
- Cash flow statement
- Balance Sheet
The income statement
Presented on 3 to 5 years it will be monthly or quarterly for the first year.
The cash flow statement
As for the results, it is monthly or quarterly for the first year, giving it a character of annual cash flow forecast and in subsequent years.
It follows from the operational forecasts (income) and changes in cash flows.
From a starting balance sheet, corresponding to the start of the project, it is proposed for the end of each period of one year of activity.
Thus, in summary, on the economic and financial process of building a business plan is presented as follows:
To form his company size and its financing needs, all entrepreneurs will take care to first identify clearly and precisely what it needs to pursue sustainable business, the resources to implement an outcome will be. Adjustments are being made by the following iterative search for the best balance. It will avoid the opposite approach would be to their needs according to size of capital available to it.
Finally and most importantly, the owner of an SME will never lose sight that beyond these elements 'mechanistic' specific business plan, its primary mission is to sell its business plan to its bankers, partners, teams and other partners. .. Perhaps the theme of another post!