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The Financial Plan As The Essential Part Of The Business Plan For The Potential Investors.

The financial plan not less than marketing, production and organizational, is an important part of the business plan. It determines potential investments, whether which are necessary for business and shows if the business plan is economically feasible. This information determines the size of needed investments and provides a basis for the investor concerning determination of the future value of the investment.

Therefore, before preparation of the business plan the manager should have a complete estimation of profitableness of the enterprise. This estimation first of all shows to potential investors, whether there will be profitable business, how many money is necessary to start a business and to meet short-term requirements for money and how this money can be received (i.e. shares, loans, etc.).

For an estimation of feasibility of business plans there are three areas of the financial information: (1) expectational values of sales volumes and expenses within, at least, three next years, (2) monetary flows within the next three years, (3) current values of components of the balance sheet and budgeted balance sheets for the period of the investment project. Financial statements and forecasts represent the short description (in monetary units) stories and the future plans of the organization. As it is so, both kinds of financial records should be integrated to the narrative description of business, its plans and assumptions on which these plans are based. Financial records should be accompanied by corresponding documents and explanations.

First, in the business plan predicted sales volumes and corresponding expenses within, at least, three-five years, with the monthly forecast within the first year should be resulted. Predicted sales volumes, cost of the sold goods, and also general and administrative expenses here should be included. Then by means of estimation of taxes the net profit after the taxation can be predicted. Determination of expectational values of sales volumes and sizes of expenses for each of the first 12 months and each next year is based on the marketing information.

The second important area of the financial information is values of monetary flows during project time, with the monthly forecast within the first year. Estimations of monetary flows show capability of business to provide expenses in suitable seasons. The forecast of monetary flows should specify initial value of money funds on the balance sheet, expectational accounts of debtors and other arrivals, and also all payments for each month within all year.

As accounts should be paid at various times within a year, it is important to specify monthly requirements of money, especially within the first year. As sales can be irregular and reception of money from clients can be dispersed also in time, there is necessary a short-term loan for repayment of constant expenses, such as the salary and utilities.
Last point of a financial part is predicted balance sheets. They show a financial condition of business during certain time. They determine means of business, its obligation, the investment of owners and some partners, and also residual profit (or the saved up losses). To the Potential investor should assumptions on which basis balance sheets and other parts of the financial plan are constituted are shown.

The days when governments have been flooding people with all types of grants are over. At least for a while. But that does not mean that one must forget the idea of getting small business grants.

Everything is possible with nicely balanced approach; small business grants including.

Go to this blog for more practical tips about grants, how to apply for grants, grant examples, traps and ticks of the grants. This information will help you to get small business grants or any other grants faster.

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