The financial planning for business plan is a sensitive thing. On the one hand, you want to populate your spreadsheets with numbers that are as accurate as possible – and on the other, there are some answers that will always evade your research. Similarly, you want to impress a potential investor or demonstrate convincingly that you can repay a loan, but making a model where the numbers seem inflated is one of the biggest red flags you can make. So what's a business plan writer to do? The answer lies comfortably in the middle. You want to get as much hard data as you can, but ultimately you might just have to make an intelligent guess. Just:
(A) Be clear about what you do. There's no harm in having an assumptions table that notes you've made an estimate.
(B) Keep your net profit percentage in line with industry averages – you should be able to find these by researching online
(C) Make sure your expenses and sales are both in a reasonable range – modeling after competing business models, as best you can, is a sure way to achieve this
(D) Get the plan reviewed by a second set of eyes!
There can be a lot to gain by having your pro forma reviewed by someone with a background in accounting or finance – better yet, if it's not your core skill set, hiring that person to make your model (and double-check the outputs) is a sound idea. The ultimate presentation should include a start-up summary, use of funds, revenue forecast, profit and loss, cash flow, balance sheet, and a sensitivity analysis. Want even more help? Call MasterPlans. We write entire custom plans from start-to-finish, and we employ the best financial modelers in the industry. Call now to learn more: (877) 453-2011.
