What should a Financial plan consist of?

 


The financial plan is one of the most important parts of a business plan. Many investors first look at the financial plan before actually looking at the idea. Make sure your financial plan is top-notch!

A complete financial plan consists of an investment budget, a financing budget and a profit and loss account. It may sound difficult, but after this explanation, you will never look back.

Investment budget you start a financial plan by drawing up an investment budget. This is nothing more than writing down your required resources. For example, think of the purchase of inventory, machines, initial stock, and perhaps liquid assets (cash and bank money). You have a complete investment budget if you then find out what these different investments cost and add them up.

Financial Plan

The financial planning for startups is often a bit more difficult. This is because you will look at how you will finance the total investment amount. Making the financing plan itself is not difficult, but it is often especially difficult to get the amount to be financed. You will have to be creative and write a good business plan. Only then do you have a chance to get some money from an investor? Especially in this day and age, it is challenging to find an investor.

Income statement

The profit and loss account, also known as the profit and loss account or operating budget, provides an overview of the revenues, costs incurred, and the final profit. It is best to make a profit and loss statement for several years. Think of three years.

Therefore, the profit and loss account consists of revenues, costs, and the final profit. To arrive at the revenue, you have to add up all the sales. Keep in mind that a sale has been realized at the moment that the sale and delivery have taken place. Therefore, the sale's payment has no influence whatsoever on the realization of the sale.

Example: Company X sold 10 products to Company Y on December 20, 2022. The products will be delivered on December 25, 2022, and paid for on January 3, 2023. Although the payment from Company Y to Company X has not yet been made, the sale can be counted as proceeds until the year 2022.

If you have calculated the revenue over a certain period, the costs must be deducted from this. Then you get the profit before tax. Tax will then have to be paid. In the case of a Sole Proprietorship and Partnership, this is done through income tax. In the case of a private limited company, this is done through corporate income tax. When the tax has been paid, the profit after tax remains, also known as the net profit.


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