A business plan can help you to decide your plan and goals and how to reach them. Serious entrepreneurs always think about their marketing, finance and team. All of them are able to help you understanding the industry and business and clearer vision of your business’ future.
A small business also needs to be rearranged and restructured to make it bigger and bigger. While you are downloading the free template for business, try to fulfill all sections, such as:
- Business strategy.
- SWOT and success factors.
- Team and management structure.
- Financial budgets and forecasts.
- Market research and analysis.
The reasons why you have to create the sample business plan are because it is pretty strategic. You started your business with certain abilities and resources and then you have your goals that have to be completed in the future (usually for three or five years later). Create a bigger business needs bigger and different set of abilities and resources than the first time you built it. The bigger abilities and resources will increase the assets and profits. The main function of business plan is to show you the ways and plans how to get from here to there.
One of those strategic business plans is about the financial plan. There are some reasons why you have to create projection to your financials:
- The financial plan interprets your business’ goals into some specific targets. All the plans here are not just a prediction but the targeted result. It is needed strong commitment to measure the progress.
- The financial business plan grants you with the vital feedback. By creating a financial plan, you will get the early warning when an error/ deficit thing occurs. This early warning provides early corrective actions.
- The financial plan is able to anticipate your business’ problems. Your financial plan will show the problems, such as a cash shortage due to inventory and investment. Because next year’s projection depends on this year’s milestone, then you have to solve the problems soon.
Below are some models of budgets and projections that are needed to develop:
- Short project model of the current year or 12-month period. This model has to be updated monthly due to it is functioned as a monitoring and planning vehicle.
- Long-range model for three to five years. This model is included the long-range strategies and goals of the company. For a small business (or a startup business), this model should be created in month-by-month projection (especially for the first year). Reaching the second year of running business, you can start creating the annual projection of at least three years.
- Budgeting model of one year running business. Your business’ budgets will transform your goals into the detail interim targets and actions. The budgets usually include some details, such as the line-item of expenditures and the specific staffing business plans in word. This budgeting model has to be created annually.
- Cash forecast models. This model included more details about cash flow. This model is usually created weekly to monitor the fluctuation of a month.
The detailed projections should be ended by at least a year. If you want to add some additional years, then those additional ones should not be more detail.
Every projection that you create should include a balance sheet and an income statement. The most clearly identified thing is the cash need. Don’t forget to add a separate statement for the cash flows. Although you still have a small business, but remember that a financial projection is a must. Your targeted goal has to be highlighted to motivate yourself and your employees.
by Irshad Shaik