Dismiss Notice
Welcome to Our Community
Wanting to join the rest of our members? Feel free to sign up today.

Business Plan for start-up 4

Discussion in 'General Marketing' started by kappa84, Apr 15, 2008.

  1. kappa84

    kappa84 Senior Member Webmaster

    IX. Financial Plan

    To make an estimate of your company’s financial future, in this chapter you must include: a profit and loss projection, a cash-flow projection and a break-even calculation.

    Profit and loss projection

    This is where you put all together and get an idea about your future business, whether it will be succsessful or not. It is preferable to write a projection for 12 month.
    You should write this projection with explainings for every major estimation about your company’s income and expenses so you could see in the future if you were wrong, where did you mistake (if you did ) etc.
    Here you must estimate 12-months sales, cost of goods sold and other expenses that could come in mind.

    Cash Flow

    Cash Flow and profit projection are very important in a business plan, so you may want to take a little more time when you write its down and you make calculations. I do not say other chapters are not important but put it that way: you cannot pay your bills, you fail.
    Here you plan how much you’ll need for startup and preliminary expenses. If you make a good cash flow it could help you in the future to cut expenses or in business negotiations (for a loan for example). After you write it down, unexpected costs will must become costs that you have expected, costs that you can afford.
    Put every item that you think it means money and start calculate. For every item determine what amount of cash will bring you, how amount of cash will cost you, so, write about when you’ll receive money for sales or when you’ll write checks for expenses. Explain when you’ll collect the money, when you buy materials, when you pay, how this can affect your cash flow etc.
    Do not forget to include even rents, loan payments, materials purchase, because in previous chapter you didn’t write about its. Its take cash out too.

    Break-Even Analysis

    This analysis predicts what are the required sales volumes and at what prices, so you can afterwards recover total costs. Here you calculate what sales level you must have to operate at profit.
    The Break-Even Analysis Formula is:

    BE = FC/(SP-VC)

    Where: BE= Break-Even
    FC= Fixed Cost
    SP= Selling Price
    VC= Variable Cost
    This analysis assumes that fixed costs are constant and that the quantity of good produced is equal to the quantity of good sold ( which in most of real-time isn’t true).
  2. seonotes

    seonotes New Member Webmaster

    This is an excellent series of post you have started kappa84. You have a wonderful understanding on this subject.

    Thanks for sharing.
  3. seonotes

    seonotes New Member Webmaster

    mods please delete this, double post..

    Last edited by a moderator: Aug 18, 2008
  4. zh00k

    zh00k Guest

    A job for teenagers

    Hello. I am from Ukraine. If you are in 12-16 years, I can produce for you good job.It is about some auctions. If you are interrested, write here zh00k @ mail . ru

Featured Resources (View All)

Share This Page