| No part of the business plan is more important than the | | | | pre-launch startup expenses will be as well as the |
| financial section. It is here that the plan can fail if the | | | | needs for additional working capital going forward. |
| needs of funders are not taken into account. The | | | | Pro Forma Financial Statements |
| financials should include the following key information: | | | | Finally, a full set of pro forma (projected) financial |
| Financial Summary | | | | statements should be included in the appendices of the |
| A simple, five year financial summary should show the | | | | business plan. These financial statements must be |
| expected growth in revenues and profit over the | | | | completely consistent with the financial summary and |
| years, as well as expenses (yes, expenses do have | | | | sources and uses of funds described earlier. The |
| to rise to allow for increased revenues). This type of | | | | statements include the income statement (sometimes |
| summary can go further by showing some | | | | called the profit and loss statement or P & L), |
| non-financial markers of success, such as the number | | | | balance sheet, and cash flow statement. Generally, |
| of full-time employees, number of locations, number of | | | | more detail is given for the first three years by |
| products sold in a year, and number of clients. Readers | | | | showing quarterly results. Additional statements should |
| will look to see that the growth described in this | | | | then show annual results for the first five years. |
| summary seems attainable from the market | | | | The income statement shows the revenues and |
| opportunity and size given as well as the strength of | | | | expenses (grouped into appropriate categories), and |
| the marketing and operations plans and the | | | | the profit or loss for each period. The balance sheet |
| management's means to execute them. | | | | shows the breakdown of assets, liabilities and owner's |
| Sources and Uses of Funds | | | | equity in the business at given points of time. The cash |
| Within the financial section there should be details on | | | | flow statement shows the cash inflows and outflows |
| the funding requirement for the business and who the | | | | from normal operations, investment in the business, and |
| funders will be. If any funding is secured already, this is | | | | financing from lenders and investors. The advice of an |
| certainly information to mention. However, if all funding | | | | accountant or business plan consultant familiar with |
| is still uncertain, this section should at least describe the | | | | drafting these statements is recommended to make |
| type of funders that are being targeted. The uses of | | | | sure that you get them right. |
| the funds should then be detailed, showing what the | | | | |