It is thrilling to develop a plan for business success and part of that is understanding your business’ finances.
This article is the fourth 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 will cover 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
As was discussed in Part One, Part Two and Part Three 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 pre-set, 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 article will deal with the current financial information section of the business plan.
The financial information section of the business plan is where you set out the financial aspects of your business. In this section, start-up businesses will include start-up costs and a description of how the loan will be used. This section will provide the reader with a clear picture of your profits and losses, cash flow and other relevant financial information. This is where you will put your balance sheet, income statement and other related documents. The financial information section of your business plan will include the following sections:
- Use of loan money
- Start-up costs
- Profit and loss statement
- Cash flow information
- Balance sheets
- Revenues vs costs
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