As part of your plan you will need to provide a set of financial projections which translate what you’ve said about your business into numbers.
You will need to look carefully at:
- how much capital you need if you are seeking external funding
the security you can offer lenders - how you plan to repay any borrowings
- sources of revenue and income
You may also want to include your personal finances as part of the plan at this stage.
Financial planning
Your forecasts should run for the next three (or even five) years and their level of sophistication should reflect the sophistication of your business. However, the first 12 months’ forecasts should have the most detail associated with them.
Include the assumptions behind your projection with your figures, both in terms of costs and revenues so investors can clearly see the thinking behind the numbers.
What your forecasts should include
Cashflow statements – your cash balance and monthly cashflow patterns for at least the first 12 to 18 months. The aim is to show that your business will have enough working capital to survive so make sure you have considered the key factors such as the timing of sales and salaries. See our guide on cashflow management: the basics.
Profit and loss forecast – a statement of the trading position of the business: the level of profit you expect to make, given your projected sales and the costs of providing goods and services and your overheads.
Sales forecast – the amount of money you expect to raise from sales. See our guide on how to forecast and plan your sales.
Presenting your business plan
To make sure your business plan has maximum impact, there are a number of points to observe.
Keep the plan short – it’s more likely to be read if it’s a manageable length. Think about the presentation and keep it professional – even if you only intend to use the plan in-house. Remember, a well presented plan will reinforce the positive impression you want to create of your business.
Tips for presenting your plan
- Include a cover or binding and a contents page with page and section numbering.
- Start with the executive summary.
- Ensure it’s legible – make sure the type is ten point or above.
- You may want to email it, so ensure you use email-friendly formatting.
- Even if it’s for internal use only, write the plan as if it’s intended for an external audience.
- Edit the plan carefully – get at least two people to read it and check that it makes sense.
- Show the plan to expert advisers – such as your accountant – and ask for feedback. Redraft sections they say are difficult to understand.
- Avoid jargon and put detailed information – such as market research data or balance sheets – in an appendix at the back.
- Make sure your plan is realistic. Once you’ve prepared your plan, use it. If you update it regularly, it will help you keep track of your business’ development.
Related articles
This is a five-part series, so make sure you read the rest to get the best out of this:
- {{post id=”business-plans-part-1-what-are-they” text=”Part One – Business Plans – What Are They?”}}
- {{post id=”business-plans-part-2-what-they-should-include” text=”Part Two – Business Plans – What Should They Include?”}}
- {{post id=”business-plans-part-3-knowing-your-market” text=”Part Three – Business Plans – Knowing Your Target”}}
- {{post id=”business-plans-part-4-marketing-and-sales” text=”Part Four – Business Plans – Marketing and Sales?”}}
- {{post id=”business-plans-part-5-financial-forecasts” text=”Part Five – Business Plans – Financial Forecasts?”}}
Further help and advice
Your accountant, if you have one, or your bank can offer support.
Your local Business Link has specialist advisers who can help you with business planning.
Enterprise Agencies may offer free business counselling and help you prepare your business plan.
Further information
You can read sample business plans at the Bplans website or see a library of business plan templates on the Microsoft Office website (www.microsoft.com).
Provided by Business Link