The financial plan component of the plan should include financial statements and forecasts for the business. This important section will explain your revenue projections, how much money you have and need, and when and how the business expects to make a profit. It will also reveal what your marketing and operational processes and plans will cost.
The financial structure of your business is its foundation. A foundation that is generally described in three financial statements: the balance statement, income statement and cash flow statement. Many people are intimidated by financial statements, but you shouldn’t be. The financial performance of any business is measured by the interrelationships among six essential elements.
These elements compose the financial statements noted above and are:
revenue, expenses, profits (or losses), assets, liabilities and net worth.
A business will prosper or fail based on the owner’s effectiveness in planning and controlling these components. The accounting statements that illustrate and measure these financial statements are the balance sheet and income statement.
Prepare the projected financials below for the first 12 month of business operations.
Balance sheet on the opening day of your business for retail operations.
Income statement by quarter for 1 year