What are the steps to building a sustainable financial plan?
The financial plan is a real bête noire for most entrepreneurs. Indeed, this part of the business plan is rather complex. Very few entrepreneurs have ever made a financial forecast. And it seems daunting at first. Dear entrepreneurs, don't panic! With the resources below, your task will be easier.
The purpose of the financial plan
The purpose of the financial plan is well-defined. According to the informations available on https://resources.hi.com, this method of the business plan is primarily aimed at determining the future cash position of the company. With the financial plan, you will also have access to valuable information for the proper development of your business. In particular, it is the exact indication of the financial profitability of your company. Remember this little clarification. It is impossible to predict the future with certainty. Therefore, the objective of the financial plan is not to anticipate the realities of the future, but rather to quantify a convincing scenario for you. The information gathered during the market research really plays a role in this.
The content of the financial plan
In general, the financial plan only contains the projected financial statements valid for the next three years. Speaking of projected financial statements, we will focus on the projected balance sheet, highlighting the matrimonial situation of your company. We also count on the projected income statement. This one shows the profit or the loss that you will realize. The cash flow forecast sheds light on the company's ability to generate sustainable cash flow. Each of these financial statements should be accompanied by comments and analysis, one after the other. In addition, the discussion should detail the key assumptions used to develop them.