As an entrepreneur, you are concerned with every aspect of your business and need to have clear goals in mind for your company. Having a comprehensive list of business objectives creates the guidelines that become the foundation for your business planning.
This information helps you determine how much financing your business needs and helps outsiders determine whether lending you money or investing in your business is a wise use of their funds.
You'll probably also want to note any personal seed capital your business has, or will have. Financiers want and often require entrepreneurs to put their own funds in the venture, and the greater the portion you commit relative to your net worththe better.
You must also determine which type of financing would be most suitable for your business. Banks offer several types of loans to businesses that do not present too much risk. Do you need a short-term working capital loan to increase your inventory?
Do you want a transaction loan, with which you receive all the money at once, or a line of credit that lets you draw on funds as you need them?
Do you need an intermediate-term loan to purchase larger assets such as real estate or equipment? Or are you a high-risk business that needs to jump through the extra hoops required to secure a government-backed Small Business Administration loan?
Structuring Your Financial Plan Begin your financial plan with information on where your firm stands financially at the end of the most recent quarter what its financial situation has looked like historically.
Then lay out your goals with financial projections for the next three to five years, depending on what lenders or investors have asked for.
These are called "pro forma" statements, and they are based on your assumptions about how your business will perform.
Your one-year projections should be broken down by month, while your more distant projections can be broken down by year. If your business plan is for the expansion of an existing business, your statements will be based on your business's existing financial data.
If your business is new, your statements will be speculative, but you can make them realistic by basing them on the published financial statements of existing businesses similar to yours.
Three Key Financial Statements Your financial plan should include three key financial statements: Let's look at what each statement is and why you need it.
Lenders and investors want to know what kind of numbers your company is working with and whether your company is profitable or expects to be soon. Balance Sheet The Balance Sheet shows your company's assets and liabilities.
It's called a balance sheet because the assets must perfectly balance the liabilities.
Within each category are numerous subcategories. For example, your assets will include cash, accounts receivable, inventory and equipment. Your liabilities will include accounts payable, wages and salaries, taxes, rent and utilities, and loan balances. The Balance Sheetis important because it shows the company's financial position at a specific point in time, and it compares what you own to what you owe.
Topics you'll need to examine to predict cash flow include sales forecasts, cash receipts vs.Business Plan - Mission and Objectives 5m 58s Management Summary and Financial Plan 3m 21s • Business Plan - Business Ratios 4m So in this case, they're saying this architecture firm is going to offer a new type of digital interactive media for the client and for the builder.
The financial part of a business plan includes various financial statements that show where your company currently stands and where it expects to be in the near future.
This information helps you. The three goal-setting approaches lead to a respectable list of goals — maybe more goals than is practical for one business plan. Select the five goals that you think are absolutely, positively essential to your business success.
Wy'East Law Firm law firm business plan executive summary. Wy'East Law Firm provides legal services to technology firms and specializes in mergers, acquisitions, and stock option plans.
Objectives. The objectives for WLF for the first three years of operation include: The financial sales forecasting tool is very intuitive and makes. If you are using your business plan to attract investment or get a loan, you may also include a business financial history as part of the financial section.
This is a summary of your business from. The Business Plan for the firm should reflect the overall strategic intent, strategic objectives, Critical Success Factors, and frame- work for moving the firm forward.