Financial Requirements
This is a crucial section, especially when the plan is being used as part of a funding application. Here you state clearly the total capital the business requires, how much you (and your partners/fellow directors) are putting in, what loan will be required, how much share capital (where the business will be a limited company), and what overdraft facilities, if any, you may need. Where you are applying for a loan, you should also state here what security you can offer (e.g. your house, or a friend/relative who will act as guarantor).
Appendix
A variety of things may be enclosed in the Appendix at the back of the plan. They may include:
CVs (Curriculum Vitae) of the people behind the business. Alternative cashflow forecast showing the effect of reduced sales. Other financial information, e.g. break-even analysis, operating budget, projected profit and loss account and projected balance sheet. Detailed product information and technical data (where appropriate). Detailed information about equipment and machinery Detailed market research information. Correspondence or agreements with potential suppliers and customers. Sales literature, leaflets, photos and so on.
Financial Forecasts
The two main financial requirements for any business are to make a profit and to generate sufficient cash to make payments to suppliers, employees and others as they become due. The objective of the financial forecasts section of your business plan is to show that your business will achieve both of these requirements. Your forecasts should cover at least a twelve-month period, perhaps more if a substantial investment is required.
Forecast Profit and Loss Account
Your forecast profit and loss account attempts to predict how much profit your business will make during its first twelve months (usually) of trading. It shows the anticipated income from sales, the direct costs and overheads which must be met out of this, and the business's anticipated net (taxable) profit.
Cash Flow Forecast
The cash flow forecast is an essential component of any business plan. It is concerned with predicting the flow of cash in and out of the business. Cash is the life-blood of any business, and failing to pay attention to this essential element is one of the commonest reasons for business failures. By assessing the predicted flow of cash into and out of the business, you can:
Identify possible cash shortages before they occur and take action to avoid them; Identify times when you may have surplus cash, and ensure it is used efficiently; Ensure that cash is always available when required, e.g. for paying staff wages; Encourage more efficient methods of using resources and saving costs; Make soundly-based decisions about your business.
A cash flow forecast lists month by month your business's predicted income and expenditure, and shows your net financial position (i.e. how much you will have in the bank) at any time. The cash flow forecast is especially important in the early days of your business, as it will enable you to see how much money you are likely to need in the early months before you start to receive a steady flow of income from your clients. - 15790
This is a crucial section, especially when the plan is being used as part of a funding application. Here you state clearly the total capital the business requires, how much you (and your partners/fellow directors) are putting in, what loan will be required, how much share capital (where the business will be a limited company), and what overdraft facilities, if any, you may need. Where you are applying for a loan, you should also state here what security you can offer (e.g. your house, or a friend/relative who will act as guarantor).
Appendix
A variety of things may be enclosed in the Appendix at the back of the plan. They may include:
CVs (Curriculum Vitae) of the people behind the business. Alternative cashflow forecast showing the effect of reduced sales. Other financial information, e.g. break-even analysis, operating budget, projected profit and loss account and projected balance sheet. Detailed product information and technical data (where appropriate). Detailed information about equipment and machinery Detailed market research information. Correspondence or agreements with potential suppliers and customers. Sales literature, leaflets, photos and so on.
Financial Forecasts
The two main financial requirements for any business are to make a profit and to generate sufficient cash to make payments to suppliers, employees and others as they become due. The objective of the financial forecasts section of your business plan is to show that your business will achieve both of these requirements. Your forecasts should cover at least a twelve-month period, perhaps more if a substantial investment is required.
Forecast Profit and Loss Account
Your forecast profit and loss account attempts to predict how much profit your business will make during its first twelve months (usually) of trading. It shows the anticipated income from sales, the direct costs and overheads which must be met out of this, and the business's anticipated net (taxable) profit.
Cash Flow Forecast
The cash flow forecast is an essential component of any business plan. It is concerned with predicting the flow of cash in and out of the business. Cash is the life-blood of any business, and failing to pay attention to this essential element is one of the commonest reasons for business failures. By assessing the predicted flow of cash into and out of the business, you can:
Identify possible cash shortages before they occur and take action to avoid them; Identify times when you may have surplus cash, and ensure it is used efficiently; Ensure that cash is always available when required, e.g. for paying staff wages; Encourage more efficient methods of using resources and saving costs; Make soundly-based decisions about your business.
A cash flow forecast lists month by month your business's predicted income and expenditure, and shows your net financial position (i.e. how much you will have in the bank) at any time. The cash flow forecast is especially important in the early days of your business, as it will enable you to see how much money you are likely to need in the early months before you start to receive a steady flow of income from your clients. - 15790
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