Creating Your Company Financial Plan – Part 2

Creating Your Company Financial Plan – Part 2

Nearly everyone who has ever started a business has underestimated the costs, and then faced the danger of running with inadequate capital reserves. The key to avoiding this pitfall is to adopt a rigorous approach to your research and planning. You may obtain a Startup Expenses Spreadsheet Template from your teacher, that you can use to lead you through the process. Follow the directions on the right hand side of the spreadsheet. Delete the directions box prior to printing. Some of your data will have to be educated guesses, particularly in light of the fact that most of your businesses are start-ups and no records are available to work from. Do your research and use your best predictions for your start-up expenses. It is likely that you will need to also include a narrative to explain your financial plan and to ensure that you meet all of the objectives (as outlined below).

Before your begin to write your financial plan, read Chapter 19 (both sections) in the Entrepreneurship Textbook and take notes. Title and number these notes accordingly and retaim them for a future notebook check.

Objectives:

1. Explain the assumptions on which all financial decisions are based.
2. Prepare a statement of sources and uses of funds that tells potential lenders and investors how much money is needed to start the business and how the money will be spent.