Business plan cash inflow and outflow is a matter addressed in the financial section of the document, but it has its roots in the narrative portion. A reader of your business plan should be able to grasp what your incoming payments are (i.e., retainers, projects from clients, item sales, etc.) and the plan's model should make clear the amount you will have to spend on ongoing categories like maintenance, website development, marketing, payroll, and other sorts of overhead. Will your space pay rent somewhere? Do you plan to set aside funds for city tax as you earn revenue? What about contractors or consultants? These are all outflows – and you need to identify and segment them in the plan. Ultimately your model needs to show:
• A use of funds and start-up summary
• Revenue forecast and cash flow
• The profit and loss statement
• Balance sheet
• A sensitivity analysis
An appendix that shows Year One broken down by month is also important to include. Small Business Administration reviewers and potential lenders will definitely want to scrutinize that critical first year post-funding, so show what the outflows look like on the balance sheet in a monthly format. The cash flow tables need to be able to allow someone to understand when your business makes payments and what the ongoing balance is for accounting purposes. Showing a positive cash balance is essential, but make sure your net profit percentage and other metrics stay in line. Want another set of eyes on your inflows and outflows? MasterPlans has the financial modeling team in-house to get your plan done right. Call today at 877-453-2011.
