Despite the fact that the financial plan is the end of your business plan, the final decision about your business idea practicability depends on this section. The financial plan is the main component in determining whether or not your business plan will attract any investment in your business idea.
The Financial Plan includes some basic parts such as the Balance Sheet, Profit-and-Loss (P&L) plan, Cash Flow Projection, and Income Statement. Mentioned documents are of planning-accounting character. Such type of planning is based on the prognosis of future business activities in specified period, and given information is used for analyzing financial position of your business.
First of all you need to gather some of the financial data and examine your expenses, as broken into two categories (your start up expenses and your operating expenses). Start up expenses may be the following:
- business registration fees;
- business licensing and permits;
- starting inventory;
- rent deposits;
- down payments on property;
- down payments on equipment;
- utility set up fees.
Perhaps your own list will expand as soon as you start writing them down.
Operating expenses are the costs you have to pay each month to keep your business running. You can spend money for:
- salaries
- rent or mortage payments
- telecommunications
- utlities
- raw materials
- storage
- distribution
- promotion
- loan payments
- office supplies
- maintenance
It is just your monthly operating expenses. If you multiply this number by 6, you’ll a six month estimate of your operating expenses. Then add the findings to the full amount of your start up expenses list, and you'll get a ballpark figure for your complete start up costs.
| 
