Have you estimated your start-up costs?

The financial plan should relate to the business plan and should list the key financial objectives which are essential for your business to achieve.

The document should explain the basic financial needs of the business, starting with the initial capital and your expected cash needs.

For example:

     to reduce the overdraft from $250,000 to $150,000
     to reduce debtor days from 60 days to 45 days in the next quarter
     to increase gross margin from 12% to 15%

The financial plan should also dovetail with the marketing plan. The plan needs to include Establishment costs which indicate the total funds required to set up your business and cover its operating costs until it becomes profitable.

Establishment costs include:

    exploratory costs such as business planning, market research and product sample costs
    initial operating costs such as lease, computer software, licenses and permits and insurances
    capital costs such as office equipment, plant & machinery, building costs, shop fittings

The financial plan should include a profit & loss projection including sales forecasts, cost budgets and profit targets for the start up period.

Always consult your Accountant and business adviser to get an independent review of your Financial Plan.