Creating a Business Plan with Financial Requirements
Every year hundreds of thousands of businesses are started. Unfortunately, many of these businesses fail due to lack of financial planning. Part of the planning phase of any business includes creating a business plan. Many start-up businesses need funding in order to begin operations. In many of these cases business owners turn to a bank loan or investors in order to obtain funds, however, most investors and bank officers will require a professionally written business plan that can validate how your idea will turn into a successful business. While many entrepreneurs can easily design new ideas and business strategies they struggle with developing financial projections. Many business owners decide to turn to business plan writers or to sample business plans which can be found online. Even when hiring business plan writers, however, business owners must have a basic understanding of financial projections.
Creating a Business Plan
One of the first steps in creating a business plan is to develop a detailed plan for how much start-up funds the company will need. Every bank officer and investor will want to know exactly how you will be using the start-up funds. Some examples of start-up expenses include purchasing land, construction expenses, acquiring equipment, marketing costs, lease payments, and operating capital to cover operating expenses during the first year. Reviewing sample business plans for similar companies can be a great way to find other start-up expenses that you may be missing.
The next step in financial planning when creating a business plan is developing financial projections. Business plans usually include profit and loss statements, balance sheets, and statement of cash flows. Profit and loss statements include revenue projections as well as projections for all of the monthly expenses the company will have. The expenses can include categories like rent, utilities, marketing expenses, and payroll. The balance sheet includes the company’s assets, liabilities, and equity. Assets can include cash, accounts receivable, and equipment, while liabilities include any debt or loans that the company has. One of the most important financial projections when creating a business plan is the statement of cash flows. The statement of cash flows details how the money is going in and out of the business. In cases when the business has obtained a bank loan, the statement of cash flows will show if the company will be able to pay back the loan and how long it will take. Business plan writers can help ensure the accuracy of these projections and provide the best opportunity for success in attracting investors.
Preparing a business plan can be overwhelming for business owners without a financial background. Fortunately, there are many quality sample business plans available online that can guide business owners in preparing a high-quality business plan. Business owners should seek sample business plans in a similar industry to theirs in order to have a better idea of what bank officers and investors are looking for in a business plan. In addition, business plan writers can be a great resource when developing a business plan. Experienced business plan writers can help business owners organize an idea into a concrete business plan that gives them the best opportunity to secure funding.