This article is the fifth in a five-part series on preparing business plans.
Each article has been dedicated to creating a plan for starting or running your business. At the end of the series, if you follow the articles and complete each section, you will have a complete business plan you can use to operate your business or seek financing. Each article covers a different topic:
- Part One: Introductory Matters: purpose statement, executive summary, and business information
- Part Two: Personnel Matters: who will work with you, and where will they work
- Part Three: Marketing Matters: who are your clients, who is your competition, how will you get more clients
- Part Four: Financial Matters: current finances, sources of income and explanation of expenses
- Part Five: Financial Projections: what will happen with the money moving forward
We are now almost at the end of the business plan writing process and if you have completed each section, after today’s section, you now have a business plan you can use to operate your business or seek financing. As was discussed at the beginning of this series, a business plan is a tool for gathering all the important information about running your business and your financial condition all in one place.
A well done business plan will help you run your business on a day-to-day basis according to a preset, well thought out and organized plan. Even in times of unexpected crisis, a business plan is a great tool, to keep you focused, on track and mindful of the big picture you have set for your business. This final section will deal the financial projections section of the business plan.
In the financial projections of the business plan, you place financial projections which are predictions based upon your business’ current financial performance along with marketing information and business planning for the future. When preparing your financial projections you must keep in mind a few factors that must be given careful consideration.
Use this section to explain to readers what the facts are that you based your projections on, such as trends in the economy, market trends, what is going on with your competitors, new products on the market and things like these. Do not take anything for granted without explaining what facts you took for granted when you made your projections. List out each assumption you made and the explanations for why each assumption is valid.
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