Why think about the financial plan of a business plan

If you are thinking of creating a business plan, you should keep in mind that the most important part is financial planning. I say this, because ultimately, "It doesn't matter what your product is, what market segment you want to acquire or even if you don't have enough revenue forecasts to allow it How To Put It All In Practice Attractive To Potential Investors.

Obviously, You Can't Come With A Financial Plan For A Well-done Business Plan Without Knowing But it is necessary to think about it and how to accomplish it.
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You have to keep in mind that the main reason for the bankruptcy of new companies in the business vision to create a good financial structure planned and directed for the growth of the company. the lack. it brings us all to make this plan:

How financial planning business plan to create a financial good make It is not necessary to be a planning economist. Just identify the details of the new business, set the goals, consider applying the resources in each case, and convert them into reality.

See step by step to get this result :

Step 1: Define Required Initial Investment

You should do a cold analysis of the required initial investment and do a business deployment such as Inst. All expenses must be checked for movement expenses, supplies, electronic equipment, physical headquarters, furniture, and everything needed to set up your business.

This number may be small. Let us assume that an entrepreneur needs $ 5.000 to run his business, but only $ 3.000.

Business Plan Financial Planning - Initial Availability

Keeping the impression that he will know what to do before going into business. In this case, the entrepreneur will have three options:

- Ask for loans/investments with great concern over how the business will affect the non-operating results

- By analyzing the cost reduction and how it will affect the end result, financially. to reconsider the plan

- to have dropped the idea to keep the little money

It may seem cruel, but professional life is like this, or you can stay alert and step in the first phase. Do not decide or you are doomed to fail.

Step 2: Project Expenses and Revenue.

If you have the necessary funds for the initial phase, then you need to check what the cost of the business usually is, and this includes Includes estimates of expenditure and revenue. You should carefully calculate all other costs and how much you can and will be able to sell in the process.

Financial Planning in Business Plan - Estimates

A major problem is the staggering number of entrepreneurs who are extremely optimistic when making their estimates. If you want to get away from this risk, try approaches where you already have information running from your business, whether it is embryonic, in beta, or with potential below your end goal.

Step 3: Analyze Key Feasibility Indicators

Indicators are produced based on previously calculated values ​​to monitor the growth and development of your business. Here are the key indicators:

- NPV - Net present value

- TIR - Internal rate of

return - Return - Time to recover the investment made in business

Depending on the investor, it may be that other indicators like EBITDA are required, But in general, if you have these 3, you will have a good idea. An interesting practice to do at these times is to calculate a potential valuation, as it will give you a good idea of ​​how much to ask for in return for a percentage of your shares in terms of investment.

Business plan sheet Financial plan in excel business plan worksheet:
now that you have understood step by step how to create a financial plan business plan, let us give an example for a machine shop:

Step 1 - Investment

As we have stated here, the first step is to understand how much you will spend on the initial investment. In this case of a mechanic workshop, we will need to calculate pre-operational investment (before the start of business) and one-time investment (which are made during business).

It is important to make this distinction because these expenditures are not operational in nature. Let's look at each of them: The initial investment will be spent in the case of a workshop, as a physical space for business, the need for equipment and machinery, and physical space for general office supplies. As an example, we raise the following investment:

- Shed: R $ 15.000 (remembering that it can be a leased shed and the cost enters month as a month of rent)

- Car lifts: $ 1500

- Equipment: $ 1000

- Computer $ 5000

- Improvement of warehouse: R $ 75000

Financial plan in a business plan - Initial investment
Be careful not to pass anything.

Other investments are investments

usually related to the potential growth of the business. Imagine increasing revenue in the workshop and the need to increase customer service with the purchase of new lifts in the second year. In this case, this cost (R $ 15.000) must enter your investment flow:

Financial Planning in Business Plan - New Investment
Phase 2 - Revenue and Expenditure Projection
Fixed Cost
Fixed costs are those that occur every month, regardless of the service. Variations in distribution. They are also known as indirect costs, as they are not directly tied to the provision of services or products.

Business plan: Step by step to build your own In our case, from the mechanic workshop, we can think about mechanics, laborers, pro laborers, purchase of parts for vehicles, and some other costs. For simplicity, I will keep these 3, but you need to expand as much as possible:

- 5 employees are getting $ 3.000 each - $ 15.000

- 2 members are getting R $ 10.000 each - R $ 20.000

- Costs with suppliers generally - R $ 30.000

Financial Planning in Business Planning - Fixed Cost Revenue Estimates
So far, usually not much difficulty, but when it comes to making revenue estimates there are many There are people who give skating and are very optimistic. Anyway, the first step is to list your products or services. In our case, we can take the services of electronic injection and motor care; Maintenance of electrical parts, installation of air conditioning, sound and the like; Maintenance, overhaul, oil or tire replacement, tipping, and painting services.

Financial Plan in Business Plan - Revenue Projection

After listing your services or products, calculate the projection of the quantity sold for each of them. Finally, enter the average selling price for the services. This will give you a good estimate of your revenue forecast. See that in the image above you see the average ticket and in another tab of the spreadsheet we have already put the amount of sales year by year.
Phase 3 - Analysis of Indicators Consolidated Results
Finally, of course, every investor or entrepreneur wants to know what the main indicators are. A business plan makes sense for this, 3 indicators that I always look for a point. I am NPV, IRR, and Payback. In the case of our workshop, the results were as follows:

- VPL - R $ 1.594.593

- TIR - 95%

- Payback -3 Year

Financial Plan in Business Plan - Financial Results

First of these 3 indicators (NPV and TIR) are positive. , Which is an indication that the business is promising, but the payback is high due to the high spending nature at the beginning of the business. The decision to invest in it can be a hindrance. One way to modify it is to rent a place instead of buying it. There are other ways to modify your metric and see what works best. It will depend on each case.

GraphicsTo conclude our third and final step, it is appropriate to have a graphical analysis of your indicators and a separate dashboard for this.

Financial Planning in Business Plan - Aftergraph following this and maintaining a monthly financial report, where all the actual data should be collected, it is possible to compare with the initial financial planning and make necessary improvements in the trajectory of the company.

Business Plan Sheet in Excel:

As you can see, financial planning is only part of this business plan. If your goal is to present a complete business plan, you need to look at the other most important topics (which will vary from PN to PN):

Executive Summary
Partners / Managers Information
Business Modeling
Marketing Plan and Market Segmentation
Strategy and Execution Plan
Business Plan sheet

If you are interested in only the financial side, I recommend two paths depending on your situation:

If You have run a business - Take control of your finances with cash flow and how it's financing in the future can behave. Forecasts about it. I recommend the Cash Project Cash Flow Worksheet for this work.
If you want to see the viability of a business that does not yet exist - in this article we make the same estimates of investment, cost, and revenue, but use the Economic Feasibility Study Sheet, which specifically deals with this financial portion.

Do you like the suggestion? Get Business Plan Sheet Here And Now Start The Ideal Financial Plan For Your Business!

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