All successful businesses require a sound plan with components that outline strategy and goals of the business. One important aspect of the business plan is the financial plan. The financial plan’s main intent is to give an overview of the business including products and services as well and marketing strategy. While products and services to be offered can be added relatively easily, the financial plan requires defined input of projected expenses before the financial plan can be outlined and completed. In other words, the financial plan is not intended to be a learn as you go document. According to Small Business Chronicle (Nixon, 2016), the goal of a financial plan is to capture expenses and so the business’s budget can be set and help ensure there are no hidden or undefined costs.
The outline of the financial plan for my business follows:
An estimate of my start-up costs is required as an initial step. This will include capital for building (which I would intend to buy) and all equipment to run the business. These assets will be listed on the balance sheet under assets. I estimate that an all in capital need is $250,000 for new equipment and building (including required modifications to suit the business). However, there are local auction houses that may lower the cost on the equipment side.
With the assets defined, I would then work on the balance sheet. Since this is a new business, I have to project my balances per month, and out as far as twelve months. If you…