Business Planning Papers:
Need Financial Projections for Your Plan ?
Use Exl-Plan for preparing comprehensive financial projections for 1/3/5/7 years ahead. Ideal for a business plan, strategic planning, cash flow forecasting, raising finance, budgeting and financial appraisals. Get full details, download free or trial copies or buy & use now.
This white paper offers practical guidance on compiling the financial/funding sections of a business plan being used to raise finance from venture capitalists, business angels and/or banks. It is not a general guide to writing a business plan - for this see How to Write a Business Plan, Business Plan Guide and Business Plan Software.
The following table presents the structure of a business plan based on our widely-used 48-page Free-Plan business plan template (for Microsoft Word). This free template can be downloaded with a 90-topic help file and 100+ page manual here.
The table is color-coded to illustrate how the financial sections fit into the overall business plan.
|1. Introduction||8. Technology & R&D|
|2. Summary||9. Operational Plans|
|3. Mission & Strategies||10. Management & Administration|
|4. Present Status||11. Financial Projections|
|5. Products/Services||12. Funding|
|6. Target Markets||13. Implementation|
|7. Marketing/Sales Plans & Projections||14. Conclusion|
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The green sections (7-10) serve as feeders into the financially-orientated red sections (11-12). These feeders should introduce relevant assumptions and data to be used in the financial projections. For example, Section 7 should spell out sales projections for the time horizon to be covered by the financial projections together with explanations and budgets for marketing/sales operations. The sales projections should be based on the proposed sales effort and should not be (simply) based on an assumed share of the target market e.g. "we expect to archive a 10% market share and on this basis our annual sales will be XX,000 units". In other words, your projections should be based on a combination of primary market research, industry knowledge, pilot selling and accepted sales performance norms and rather than crystal ball gazing.
Here are some other suggestions to consider when preparing feeder sections:
2. Financial Sections within the Business Plan
Typically, the financial sections of a business plan would include the following subsections:
For detailed guidance on the target length and contents of these sections, see 11. Financial Projections and 12. Funding in our Business Plan Guide. The white paper on Preparing Financial Projections may also be of interest.
When presenting your financial projections, DON'T DO any of the following:
Instead, make sure that you DO the following:
Here is a comprehensive Checklist on How to Write a Business Plan which will help you avoid pitfalls and traps.
4. Determining Your Funding Requirements
When using a fully-integrated financial modeling tool like our Exl-Plan software, it is easy to determine funding requirements as follows:
Base your funding needs on the "most likely" projections but take account of higher requirements suggested by the "worst" case - it may be prudent to seek too much money rather than too little!
Here is some more information about Exl-Plan, our range of powerful, easy-to-use packages for preparing comprehensive financial projections:
5. Introducing PlanWare
PlanWare develops and sells a range of financial planning packages - Exl-Plan and Cashflow Plan - for businesses of all sizes & types. Trial versions of all products can be downloaded from our PlanWare site and many other sources on the 'Net.
We also offer an extensive range of commercial software for writing business plans, market planning, assessing business ideas and evaluating strategies.
PlanWare also features:
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