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The One Page Executive Summary

November 24, 2010 by Frank Goley, Business Consultant

The Executive Summary is often touted as the single most important part of a Business Plan. If the business plan is to be used for external uses, such as a Funding Business Plan or Joint Venture Business Plan, then, yes, the executive summary is of pivotal importance. The executive summary must be concise (no more than 3 pages) and encompass the most important parts of the business plan for the particular audience/reader. In many instances, particularly if you are going after Venture Capital or Angel Investment, the executive summary can only be one page. It is a huge challenge to get the most salient points of the funding business plan on one page, and a challenge I just recently met as a Business Consultant with our Executive Summary Service for a client competing for angel investor seed finance.

Organize the Executive Summary Layout in Two Columns

I suggest using Power Point and lay out a one page slide with a 1/4 page column with a border on the left side of the page, and next to it, a 3/4 page column that has boxes with borders of various sizes (per the amount of information needed in each box). Please see the attached One Page Executive Summary Example (PDF) format and layout. By dividing the page into two columns, you can fit a lot of key information into one page. The suggested format should be customized per your company, purpose, funding and target.

Customize the Executive Summary for the Reader

If the reader of the executive summary is a specific venture capital firm or angel investment network the odds are they will have a preferred format and structure for the one page executive summary. So be sure to customize each executive summary for each particular funding group you target, or whoever the intended target of the executive summary is (such as a joint venture partner or strategic alliance target).

Create as a Power Point

By creating the one page executive summary as a Power Point document, you can easily embed a video to demonstrate your product or service. Video brings an executive summary to life and gives the reader a real look into how your product or service works. Be sure to keep the video short (no more than 30 seconds) and small in size so the document doesn’t become a huge file. Note: This assumes you are emailing the Power Point or presenting the opportunity via a computer presentation.

Getting Interest is the Number One Goal

You can’t completely prove out your business model in a one pager so don’t try. The executive summary should entice the reader to ask for more information or meet with you. The Business Plan is the next step and will show how you as a company can realistically achieve the goals and numbers set out in the summary.

The Team is Most Important

Any experienced venture capitalist will tell you that the company team is much more important than the product. You can have the best product in the world with a crappy team and fail. You can have a fantastic team with a crappy product and succeed. Winning company teams find business models that will work despite the product or service offering. Be sure the executive summary shows the clear advantage the company has with the team that is in place and members to come on board as the company grows.

The One Page Executive Summary Works

The before mentioned client (see paragraph one) came to me because they were trying to win a contest for initial angel investor seed funds to get their company positioned for later round Venture Capital. They had tried 6 months ago to compete against 2,000 companies and didn’t get close to the final round. This time they contracted me for our Executive Summary Service, and due to the one page executive summary, they have made it to the final 12 companies out of 1,600, increasing their chances of getting angel investor funds 1,000%. They attribute the one page executive summary to getting them this far, now the product and team presentation will determine if they get the funds. Either way, funds or no funds, they have the visibility in the angel community they desperately needed to get funding for their company. A simple document brought them this opportunity and timely visibility.

Remember: The Executive Summary is just the first step. You need to have a Business Plan to back it up. Have your ducks in a row! You may want to consider our Business Plan Service for your business planning needs, whether for funding, business success, or another business plan purpose. All of our business plans are customized to our customers needs and contain an executive summary. We offer Four Levels of Business Plans to meet most purposes and budgets…

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Developing, Writing and Implementing a Business Plan Takes Commitment and Diligence

November 12, 2010 by Frank Goley, Business Consultant

One question: Do you have what it takes to see a business plan process through?

I am always surprised as a Business Plan Consultant how a business planning process brings a company to its knees. Admittedly business planning is difficult, but it certainly isn’t impossible. I just find that business owners and entrepreneurs don’t like to do it and want to skip ahead of it. By skipping ahead, they are taking a huge risk, inestimably saying, “I will guess how to be successful with my business.” Do you want to guess with your hard earned dollars and risk the livelihoods of those who come everyday to work for you? Of course not…

To Develop a Good Business Plan Takes 75 – 150 Hours

And sometimes business plans require 200-300 hours of work. It really depends on the circumstance and size of the company, scope of the market and how comprehensive the business plan needs to be. If you are working with a Business Consultant on the plan, plan on dividing that time between you. No matter how good and experienced the business consultant, good business planning takes a lot of involvement from the business owner and team members.

Work on the Plan a Little Bit Everyday and Make it a Priority

Business owners and team members are busy. I get it. You have a business to run. Set aside 2 hours per day for your business planning. That’s it. Doing a little work on it everyday is better than trying to work 5-10 hours on it at one time. Business Planning is a marathon, not a race. Doing a little bit every day of the week will quickly add up and real progress will be. Moreover, you won’t get burned out and your thought process behind the business planning process will remain sharp and fresh. I recommend doing your business planning first thing in the morning before your busy day starts. Make it a priority, and it will get done in a timely, efficient and effective manner.

A Business Plan Process Builds Momentum

If you look at the totality of a business plan, it becomes very daunting. But if the business planning process breaks it down into little steps and in a building block architecture, then the Business Planning gains momentum over time, becoming easier and much more enjoyable as you progress. Business planning can be enjoyable if you get that momentum and see the result of discovering things about your business, market and competition that you didn’t know prior.

When the Business Plan Document is Done, You are Just Getting Started

What use is a Business Plan if you don’t implement it? Otherwise, it is just a document collecting dust. A business plan is a roadmap to success and should have step by step implementation as part of the Strategic Plan roll out. A business plan is really never done. It is a continuous tool, process and system to use to sustain competitive edge, to quickly spot market trends, to anticipate problems, and to uncover hidden opportunities. A business plan is a living, breathing, dynamic tool to use on a daily, monthly, quarterly and yearly basis to guide a business through the minefields to come.

ABC Business Consulting offers 4 levels of business plans to meet most business planning needs, goals, budgets and objectives.

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Top 10 Reasons a Business Plan Fails to Help a Company Obtain Funding

November 5, 2010 by Frank Goley, Business Consultant

In my Previous Blog Post, I discussed two of the fundamental reasons why a company’s Funding Business Plan Fails to Help Obtain Funding. These two often missed business planning fundamentals are: Inadequate Business Plan Process and The Business Plan Didn’t Adequately Prove How the Business will Succeed. In this blog post, I continue with 10 more top reasons why Funding Business Plans fail to help a company obtain funding.  

#1 – Experience Level of the Company Principals is Lacking

This is a biggie. If you don’t have the right mix of experience on the founding team and management, then finding funding will be extremely difficult. In your Business Planning, identify your management gaps and determine ways to fill them and overcome them.

#2 – Lack of a Business Track Record

This goes along with #1. To obtain Business Finance, whether from a bank or investor/venture capital, the business plan clearly needs to show previous successful and unsuccessful business track records. Unsuccessful business experiences are good since they show how an entrepreneur has learned and adapted, as long as, the non-successes don’t overshadow the successes. At the end of the day, the company principals need to show successful track records. They did it once, they can probably do it again is the thinking.

#3 – Unrealistic Financial Projections

As a Business Consultant I see this all the time in Business Plans. If the Business Planning Process builds a well researched and reasoned Marketing Plan and Strategic Plan, then more times than not, the Business Financials will be based on good assumptions and reflect real market realism. However, many companies in their business planning short the marketing and strategic planning processes, which produce wild guesses in forming the financial projections.

#4 – Lack of Existing Cash Flow

Bankers and investors alike want to see a company that is bringing in some cash flow. This makes the business plan objectives and projections a lot more believable and the funding request a lot more palatable. Signed contracts also indicate future cash flow if funding comes through- this is a great hot button for funders.

#5 – Lack of Company Principals Cash Contributions

If you can’t / won’t commit personal funds to your venture, why should anyone commit theirs? Need I say more? 10-20% principal cash contribution makes for a strong funding request.

#6 – Inadequate and Poor Quality Collateral

You probably can’t finance all of your business plan with just cash investment. Good collateral goes a long way toward opening up your funding options and possibilities. Offer clean collateral that is fundable. Good real estate with cash flow is great, good assets, equipment and so forth. Cross collateralizing can be an option and often pulls in the security a funder is looking for to make the leap to fund a company. Collateral that is highly leveraged with liens or poor quality collateral just makes your funding request look sub-par.   

#7 – Bad Executive Summary

The Executive Summary makes the first impression. A poor summary will get your funding business plan quashed in 30 seconds. Give your plan a chance with a well developed and presented executive summary.

#8 – Poor Ancillary Documents

A Business Plan alone isn’t sufficient for funding. You also need a good Loan Package and Investor Overview. Get your documents and packages done prior to starting your funding search so you can be jimmy on the spot with the funder’s request for more information. Good due diligence goes a long way to successful business funding!

#9 – Messy Business Plan

A messy plan means a messy business. Funders don’t fund unprepared companies and companies that don’t care about their work. The business plan needs to be neat, clear, easy to read and scan, legible, and presented using good writing and grammar. While every plan needs substance, it is the polishing of the plan that gives the substance that added edge. An edge that can and will get you funded.

#10 – No Substance Behind the Flashy Colors, Tables and Charts

As a Business Plan Consultant I see these “good looking”, flashy business plans all the time. But upon closer inspection, I find them hollow and lacking any real substance. It is the substance that gets you funded, not the flash, not all the color graphs and charts and photos. It is good to have some of this pizzazz, but the substance and reasoning in the plan is what makes it believable. Many business plans are produced using templates, samples, and cookie cutter content. These types of plans are thrown in the garbage can in 30 seconds or less by a funder. Meld your substance with some flash for best results.  

Need help on your Business Plan? We offer FREE Business Plan Reviews…

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The Fundamental Reasons Why a Funding Business Plan Fails

November 1, 2010 by Frank Goley, Business Consultant

Business Plans don’t guarantee funding. It is the foundation and fundamentals behind a Business Plan that give the plan and company the best chance to obtain funding. The distinction is important. No matter how colorful, flashy, professional looking and apparently well written a business plan is, there are business fundamentals which need to be proven out in the plan to make the funding request viable. We see so many business plans on the market that look great from an aesthetic standpoint and appear to have all the necessary ingredients, but upon closer inspection are just canned, cookie cutter plans that prove little as to specifically why a particular company is a good investment or lending risk. A sample business plan that got one company funding won’t get another company funding unless that company has the right business fundamentals in place. Let’s look at the top two business fundamentals often missing in a business plan that fails to help a company obtain funding.

Inadequate Business Plan Process

The quality and depth of the Business Planning Process is more important than the business plan itself. If the process is lacking, then the produced business plan will be significantly lacking. The planning process needs to be customized for the particular business. Our Business Planning Customers often remark that the process behind the business plan development was extremely beneficial, even more so than the finished plan itself. A good business planning process uncovers problems and addresses them prior to sending the plan to a funder, maximizing the reception to the plan and the results of the plan.

Tip: Please see my Business Plan Book for a proven business planning process that can be applied and customized to all types of companies, no matter the stage, size or funding level.

The Business Plan Didn’t Adequately Prove How the Business will Succeed

This is a huge point. As Business Plan Consultants, we see many funding business plans being developed in the marketplace which are shallow, hollow plans that do little to adequately and realistically prove to the funder that the business is capable of being successful, servicing the debt level requested, and being a good investment risk. The underlying principle behind any business plan, no matter its purpose, is to prove out and show how the company will run successful business operations. Due to the success of the operations and marketing of the company, a case can be made for funding. A Funding Business Plan is really just correct formatting and having the information a funder is looking for. It is the fundamentals behind the plan that prove a best chance for business success that helps to position the company for a successful finance campaign. If a plan is lacking these fundamentals, it will never have a chance at obtaining funding.

My next blog post will explore some more of these business fundamentals and other reasons why a business plan fails to help a company to obtain funding.  

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Have You Updated Your Business Plan Recently?

October 13, 2010 by Frank Goley, Business Consultant

A lot has changed in this prolonged recession. Has your Business Plan been updated? Or has your business plan been collecting dust on the shelf somewhere? We are all guilty of this. We shy away from the critical planning that needs to be done on a consistent basis to be successful, no matter what the markets and economy throw at us. Here are reasons why you need to update your business plan today… 

Things Change Constantly in Business 

Your customers, markets, niches, industry trends, etc all are in a flux of change. A successful business stays in touch with change and adapts to best serve markets and customers. Often businesses who fail in this area, have failed to plan. Preparing a business plan is just the first step. Your Marketing Plan and Strategic Plan need to be assessed on a monthly and quarterly basis to determine if your plans meet the expectation and changes occurring in the marketplace. Are your Financial Projections still accurate and the underlying assumptions realistic and correct? The business plan just gets you halfway to first base, it is the implementation, tracking, measurement, assessment and adjustment of the plan as your company moves forward that is most important.

Have You Even Implemented Your Business Plan?  

A business plan is just a document. While the Business Planning Process can be very beneficial for a company, it is the implementation of the business plan that really counts. You will never receive the great benefits of a business plan if you don’t implement it. So dust off your business plan, update it for the current economic and market conditions, then set out a clear cut, step by step plan on how you will implement the plan. Then it is just a matter of tracking the results and making adjustments as you go. 

Update Your Business Plan on a Monthly and Quarterly Basis 

Have a 2-3 hour session every month and a half day session once per quarter to review your plan and the results gained thus far. Make changes and updates to your plan on a team basis so the entire company is involved in the strategic direction and success of the company. A plan should be a living, breathing document. It needs to be intertwined into the fabric of a company to be successful. It is a dynamic tool which needs consistent commitment and diligence. The time put in updating a plan will pay off well in profits later. A little time spent on updating your business plan will have significant ROI in the future. Understanding where your company is going and exactly how you are getting there are two of the most important strategic elements of a successful company.  

For help on your business plan, please consider our FREE Business Plan Review service…

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Free Business Financial Projection Software

September 21, 2010 by Frank Goley, Business Consultant

Developing Financial Projections for your Business Plan can be a trying and complicated experience if you do it from scratch. It doesn’t have to be that hard, nor does it have to cost a bunch of money to do. There is a lot of business planning and financial projection software out there for purchase. However, if you are looking to develop some solid financials with out the cost of software, then there are some good free financial projection programs out there. One of them is offered for free by SCORE®.

6 Step Worksheet

Very simple to use. It highlights mandatory and optional areas for your input, and it contains a six step worksheet process. Just fill out:

§  Required Start-Up Funds

§  Salaries and Wages

§  Fixed Operating Expenses

§  Projected Sales Forecast (2 sheets)

§  Cash Receipts and Disbursements

Produces The Financials for You

After filling out the necessary information in the six worksheets, the program produces the following financials for you: 

§  Monthly Income Statement for three years

§  Monthly Cash Flow Statement for three years

§  Yearly Balance Sheet for three years

§  Year End Income and Expense Summary for three years

§  3 Year Financial Ratio Analysis

§  Breakeven Analysis

§  12 Month Amortization Schedule for three years

§  Financial Diagnostics Sheet

Be Sure to Read the Notes Explanation

There is a sheet containing explanatory notes for the financial projection program. Be sure to review it before you start.

Provides an Example Financial Projection Template 

In case you have questions on how the program works and the types of financials it produces, the program provides a fully competed financial projection template to assist you. It also gives you an idea of the finished product.

Free Mentorship 

You can use a local SCORE® mentor to answer any questions you may have developing your business plan and financial projections.

Options 

While Free financial programs don’t have all the bells and whistles, this program will get it done well for many small businesses. Check it out and see if it will work for your needs. Be sure to do some searching on the internet and find the other free financial projection programs out there. There are a bunch of them.  

Disclaimer: ABC Business Consulting and the Blog Author are not endorsing the product mentioned in this blog. This is for informational purposes only.

Posted in Business Financials, Business Planning. Comment

Should You Hire a Business Plan Writer or Business Plan Consultant?

September 15, 2010 by Frank Goley, Business Consultant

Should you hire someone to write your business plan? 

The answer is Yes and No.  You do not want a Business Plan Writer or technical writer to build the business plan.  You can use these writers after the business plan is built to make it more professional (i.e. adapted for a Funding Business Plan).  However, hiring an experienced  Business Plan Consultant can be quite advantageous when building a business plan.

A Good Business Plan Consultant Understands Your Business

A good Business Consultant will take the time to get to know you and your business. The business plan consultant will issue you important business plan questions and requirements for you to answer, which when analyzed by the consultant, will build an effective Business Plan.  Nobody can solely write a business plan for you.  The business owner and management team must be integrally involved in the business planning process as you know your business better than anyone else.  A good Business Plan Consultant harnesses the necessary information by asking the right questions in order to build a solid Business Plan, while applying and providing valuable expertise and experience during the planning process.

Benefit from the Experience of a Business Consultant

A  Business Consultant can also offer years of experience in working with many different types businesses, business stages, and business sectors, utilizing that know-how and experience in building your Business Plan.  If you hire a Business Consultant early on in the business development stage, the consultant will not just help to build an effective Business Plan, but also be available for advice as you implement your Business Plan and grow your company.  A Business Consultant can show you effective ways to maximize profits and margins, while minimizing expenses.  Moreover, a Business Consultant can introduce you to important business networks and connections to bolster your company operations.

ABC Business Consulting offers the best of both worlds:  Business Plan Writing and Consulting Services for companies in any stage and industry, for most purposes, including Business Success Plans, Start Up Business Plans, Growth Business Plans, Acquisition Business Plans, Joint Venture Business Plans, Project Business Plans, Marketing Business Plans, Strategic Business Plans, Funding Business Plans, Venture Capital Business Plans, Investor Business Plans, SBA Business Plans, Bank Business Plans, Lender Business Plans and more.

ABC also offers Free Business Plan Reviews.

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Tips for Writing an Effective Business Plan

September 10, 2010 by Frank Goley, Business Consultant

Business Mentor Review 

Have a business mentor who has a lot of experience in your area of business read your business plan and critique it. Use the feedback to tweak your Business Plan. 

Don’t Go Crazy with Excessive Graphics  

Business Plans do not need a lot of fancy graphics and art work to be effective.  Simplicity and straight forwardness are more important than a bunch of pretty graphs.  Many modern business plans lack substance and have lots of flash.  Add some flash and graphics to the plan after the substance of the plan is completed and only if it aides the understanding and comprehension of the written content. 

Develop a Good Business Plan Process 

What is the most effective way to build a business plan?  For each section of the plan, write out questions prior to writing the section.  Pull the questions from your experience, your team’s experience, your mentor’s experience and published business planning books and software.  Answers to the questions will build out that particular section.  Order the sub-sections in a logical, building block order. Please see my Business Plan Book for more details on this business planning process.  

First Develop the Comprehensive Business Plan 

After you have developed your Comprehensive Business Plan, you should develop specific business plans of shorter length and format (usually no more than 20-30 pages in length) for various purposes:  Funding Business Plan, Investor Plan, Joint Venture Business Plan, Marketing Business Plan, Strategic Plan, Customer Plan, Supplier Plan and so forth. 

A Business Plan is a Business Document 

A Business Plan is a technical document – a business document.   It should be written as such.  It should not be written like a novel or a book.  It should be concise and utilize outline organization versus long, wordy paragraphs. 

Realistic and Believable  

A business plan should be realistic to be believable.  It should contain facts and figures to support the “believability factor.”  For instance, just stating in your Marketing Plan that you will achieve 5% market share is not enough.  Your Strategic Plan in combination with your Marketing Plan should carefully illustrate how you will achieve 5% market share. 

Business Plan Purposes 

A comprehensive Business Plan serves two purposes typically: a dynamic document to run your company successfully, and a document to start, acquire or expand a company, all backed by the shorter version business plan formats (i.e. a Funding Business Plan). 

A Successful Business Plan is Dynamic

An effective Business Plan is never static.  It should be dynamic and easily adaptable to changes in the market and opportunities which arise.  It is a “living” document used to run your business on a daily, monthly, quarterly, and annual basis.

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Forming the Appendix Section of a Business Plan

September 9, 2010 by Frank Goley, Business Consultant

An Often Overlooked but Important Section

The Appendix of a Business Plan can be an overlooked section, but it has a lot of importance and utility. The appendix shows the amount of research, time and detail behind the business plan. It comes last in a business plan, following the Financials Section.

Organize and Reference Your Appendix Materials

As you write a business plan and accumulate resumes, research, contracts, etc, be sure to place them in a pile to be included in the Appendix. Also be sure to reference the materials in the business plan so the reader can refer to them when and as applicable.

Table of Contents

Since an Appendix is often large in volume, it is important to have a table of contents in the beginning of the section, detailing what is contained and where it appears in the Appendix section.

What the Appendix Can Contain

The Appendix Section of a Business Plan contains all the bulky items:  marketing research, construction plans, appraisals, valuations, company art work and graphics, company charters and share details, and so forth. 

Item List for a Business Plan Appendix

The Appendix contains important documents, agreements and voluminous materials that add clarity and detail to your Business Plan.  This list is not all inclusive and should be expanded and customized per your business and business plan requirements.

1)     Detailed Resumes

2)     Customer Testimonial and Recommendation Letters

3)     Future Customer Letters of Intention, Letter of Interest and Memorandums of Understanding.

4)     Reference Letters:  Customers, Suppliers, Bankers, Technical, Former Employers, Partners, etc.

5)     Joint Venture and Strategic Alliance Agreements

6)     Land Purchase Agreements

7)     Product and Service Agreements

8 )     Other Important Agreements

9)     Contracts, Leases and Pre-Sale Commitments

10)  Patent, Trademark, Service Mark, Copyrights, License Agreements

11)  Brochures and Advertising Materials

12)  Industry and Marketing Analysis and Studies

13)  Supporting Articles

14)  Product Line Pictures, Renderings and Illustrations

15)  Facilities and Equipment Pictures and Layouts

16)  Maps and Photos of Business Locations

17)  Construction Plans, TimeLine and Disbursement Schedule

18)  Engineering Studies

19)  Company Registration and Charter

20)  Company Credit Report

21)  Tax Returns:  previous three years

22)  Annual Reports / Quarterly Reposts

23)  Appraisals and Valuations

24)  Feasibility Studies

25)  Prospectus Offering

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The Financials Section of a Business Plan

September 8, 2010 by Frank Goley, Business Consultant

Lay the Foundation with a Good Strategic Plan

If you develop your Strategic Plan effectively, completing the Financials should not be difficult.  The principal reason why business owners have such a hard time with the Financials Section of a Business Plan is often due to a cursory job on their Strategic Planning (as well as other important business plan sections).  Financial Projections are not believable chiefly because a suitable, well developed Strategic Plan wasn’t accomplished.  Guess what lays the foundation for a successful Strategic Plan?  The proceeding section, the Marketing Plan.  As stated previously, the sections and the order of the sections in a business plan are very important because each section builds on the previous section, the culmination of which makes for certain data from which solid Financial Projections can be made.

Types of Financials

You should have two sets of Financials, simple and detailed, as well as, conservative and best case.  The following types of financials are typical for a Business Plan:

Ø  Cash Flow: Monthly basis for 12-36 months. Yearly and Quarterly basis for 3-5 years.

Ø  Income Statement: Monthly basis for 12 months. Yearly and Quarterly basis for 3-5 years.

Ø  Balance Sheet:  Yearly and Quarterly basis for 3-5 years.

Budgets for Planning and Control

Another very important Financial in addition to the three prescribed Financials, is the Budget.  Budgets are used principally for two purposes:  Planning and Control.  A Budget matches short term targets with long term Strategic Planning, while providing an indication of problems ahead.  A good Budget system will indicate when Expenses are heading over Budget and there is sufficient time to correct the problem. Budgets are often developed during the Strategic Planning Process.

Rolling Budgets

We like Rolling Budgets which look ahead 12 months on a monthly basis, and it budgets an additional Quarter at the end of each Quarter.  This way, you always have a 12 month continuous Budget Outlook.  A Budget should also be flexible so that you can separate the effects of variations between Actual and Estimated results.  Lastly, a Budget is a tool to Evaluate your Business Units and Management’s Performance.  Needless to say, assembling and actively managing a good Budget requires the input of your entire organization.

Financials Relate

It is important to understand that your Financials relate to each other when building them (a reason why Financial Software Programs are so beneficial).  There’s a lot of back and forth between the Income Statement, Balance Sheet and Cash Flow Statement.  The Cash Flow Statement is the most important Financial for many reasons but principally because it shows in detail how much cash is necessary to finance and grow your company.

Projection Period

The projection period differs and depends for a particular company, venture or project.  For instance, a large scale Real Estate development project’s Cash Flow could be 5+ years and 60+ months depending on the length of the project build out.  Also, Real Estate development projects require more Financials than detailed above. Typically, a Construction Cost Analysis and Cash Flow, Schedule of Real Estate, Construction Cost Schedule and so forth are required and useful. Real Estate Development Financials are developed through a Loan Package and transferred to the Business Plan Financial section, so consult how to properly package a loan in order to learn more about these project specific Financials.

Assumptions 

A very important element of the Financial Section is the Assumptions area.  This details the assumptions you have utilized in constructing the financials.  You should also list the various calculations and formulas used in your financials since those formulas can be company, deal or project specific.  Financials should also include Return of Investment / Return on Equity calculations and the assumptions used in those calculations.

Realistic Financials

Your Financials need to be believable and realistic.  If anything, they need to be conservative.  Too often we see extremes of too few numbers or too many numbers.  If you build out your Financials as a direct result of your Strategic Plan, this process results in numbers that are realistic and achievable.  An option is to build two sets of Financials, conservative and a little more aggressive.  We find if you have truly conservative numbers, you will often exceed your Plan, which is a great Psychological boost for any company in any stage of development. 

Example Template for the Financials Section of a Business Plan

1)     Sources and Uses of Funds

2)     Financial Strategy

3)     Capital Equipment Valuation

4)     Company Collateral

5)     Assumptions

6)     Financials

7)     Valuations

8 )     Financial Analysis

9)     Budgets

10)   Exit Strategy

11)   Harvesting Value Strategy

12)   Venture Risk

13)   Effects of Investment and Finance on Cash Flow

14)   Tax Strategies

More Help

Please see my articles on Business Financials for more details in this area…

Posted in Business Planning. Comment