Part 1: The Financial Plan Section of the Business Plan
The Financial Plan section is the last part of your business plan and will be include your financial statements such as your income statement, cash flow projections, and a balance sheet. You will also briefly explain and analyze each of these three statements.

This section will determine whether your business idea is viable and will determine whether or not you will be able to attract any investment in your business idea.

We will guide you through on how to prepare each of these three financial statements; however, you need to first gather some of the financial data you will be needing to prepare these financial statements for your business plan. This is easily done by examining your expenses.

Your business expenses can be broken up into 2 categories:

  1. Start Up Expenses
  2. Operating Expenses

These expenses might include:

  • Business registration fees
  • Business licensing and permits
  • Starting inventory
  • Rent deposits
  • Down payments on property
  • Down payments on equipment
  • Utility set up fees

These are just examples of some start up expenses; once you start listing your own it will probably expand longer than this.

Operating expenses are the costs to keep your business up and running. These are fixed costs which you’re going to have to pay each month no matter what. These may include:

  • Salaries
  • Rent or Mortgage Payments
  • Telecommunications
  • Utilities
  • Raw Materials
  • Storage
  • Distribution
  • Promotion
  • Loan Payments
  • Office Supplies
  • Maintenance

Once again this is just a partial list to give you an idea of what you will have to include in your operating expenses section of your financial statements. The total list will show you what it will cost to keep your business up and running each month.

Multiply this number by 6 and you will have an estimate of what your operating expenses will be. Add this total to your start up expenses and you’ll have an idea of your complete start up costs.

Tomorrow we will explain how to put together some financial statements for your business plan starting with the Income Statement.

Part 1: The Financial Plan of The Business Plan - Financial Statement
Part 2: The Financial Plan of The Business Plan - Income Statement
Part 3: The Financial Plan of The Business Plan - Cash Flow Projections

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