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How to Write a Business Plan:
Financial Planning Steps

Generating the financial plan and accompanying pro forma financial statements for your business plan is a project in and of itslef. Undertaking this can be as time consuming as the writing of the entire remainder of the business plan's narrative. The following steps should guide you through this process.

Start With a Financial Model

Ideally, you should have a business plan template or financial worksheet which provides an Excel model to simplify the financial planning process. The Excel model should include short-term (2 or 3 year) and longer-term (5 year) financial statements (balance sheet, income statement and cash flow statement) all built out of formulas that tie them together. A worksheet should allow for you to test different levels of sales and costs to see the financial results in the statements. Creating a model like this from scratch can take a long time and require deep knowledge of the accounting principles behind financial statements which not all new entrepreneurs have.

Startup Costs

Next, pull together all of the research you have gathered on the costs you will incur before you launch the company to determine the capital investment needed. These costs will include early marketing, salaries (if any), equipment, furniture, leases, business licensing, and insurance. The model should have a place to add this information.

Revenue Projections

Think deeply about what will drive revenues in your first years of operation. Create assumptions based on these revenue drivers, scaling up revenues at a conservative, but appropriate, rate over the first five years of operation. If you will expand your staff or add additional locations, make sure to incorporate the effect that this should have on revenues.

Check Cash Flow

Finally, double check that the cash flow statement shows an ending cash balance that remains positive at all times. If it goes negative, the company is under-funded and needs to raise additional capital in the start-up phase. Either add to the capital invested or loaned or find a way to reduce your startup costs if you find cash balances dipping below a reasonable reserve level at any time.


Finish Your Plan Today With Our Business Plan Template!

If you want to create your own business plan quickly and easily, we now offer an business plan template that allows you to develop a professional business plan in hours or days, not weeks or months.

Visit this link to learn more: http://www.growthink.com/products/business-plan-template

OR, We Can Develop Your Plan For You


Our professional business plan writers can create your entire business plan for you. We will make sure your business plan is sound and ready for investors so you can continue to focus on running your business.

To speak with a Growthink business plan consultant, call 800-506- 5728 or complete the form below.

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Thank you very much for all of your hard work. We are very pleased with the final result of the business plan and the PowerPoint - say congratulations on a job well done and that you can use us a reference for any future clients. We will definitely look to utilize Growthink's services in the future as we build our company.

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MediaCompound



Without Growthink’s professional help, we would never have been able to create an effective business plan. Growthink not only did deep research on our business environment, but its representatives also listened to us and refined their analysis to include what we had found out through experience. We would recommend Growthink to any start-up business which does not have a professional business plan developer on staff!

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Laptop Mini Mart



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