A Good Business Financial Plan is Your Secret Weapon
Basically it's a document that contains the financial particulars of a company & generally includes the following sections:
- A balance sheet
- A cash flow statement
- An income statement
Your company financial plan is one of the most effective instruments for ascertaining whether a business model is workable. It's 'the plan' encompassing all the present financial issues as well as future predictions for the business. It's what you revert to when things go wrong and when thing go right.
It can be used
AN EFFECTIVE FINANCIAL OUTLINE SHOULD INCLUDE THE FOLLOWING DETAILS...
- Start up costs
- Operational costs
- Cash inflow
- Other relevant information
WHEN IT COMES TO FINANCING A BUSINESS, THERE ARE OPTIONS...
Option #1 - For a small home operated business, you personal savings my be enough to start up a business. You may wish to think about keeping some funds in an emergency account, just in case.
Option #2 - If you're short of cash you could approach family members or close friends and ask them if they can help. But do, think it through thoroughly.
If you're not absolutely sure that the business is a winner, perhaps you're better off not borrowing from your near and dear ones. It's happened many times, good relationships destroyed over money.
Option #3 - You can turn to the banks or credit unions for finance.
Generally this involves a meeting with the bank manager where you can explain your business financial plan and try to convince him that your business idea is a clear winner and there's no doubt that you'll be able to repay the borrowings without a problem.
Option #4 - You may wish to look for investors to finance your business. Attracting backing from a third party will be difficult and to be successful you'll require a rock solid business plan and be able to 'sell' your dream in such a way that it's irresistible.
Being able to read & comprehend complex business documents is a valuable skill to have. We all know that, in business, the paperwork in the most boring part and we can usually discover something more interesting to do.
A detailed business financial plan is possibly THE MOST important document of the many that are required to kick-off a new business venture or to fund growth for an established company.
Understanding business documents is an extremely important issue when running a business but there are more important issues ahead not the least of which is attracting new customers.