How to Prepare a Financial Plan
A financial plan can include a variety of content areas; however, for a financial plan to be effective, it must create a financial summary of your organization's financial health. When writing your financial plan, sit down with an accountant and look at your organization's books. You want information that is accurate and current. As information changes, you can update your financial plan by attaching new pages to your original document.
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Instructions
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Create a snapshot of your organization's current and expected profit margin. Known as an income statement, this part of your financial plan looks at your organization's revenue and expenses to weigh how the organization is doing now and in the future.
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Outline how you expect money to flow into and out of your business. Create a cash-flow projection for each month of operation. Compare this figure to your organization's end of month cash flow, which will total as a surplus or a loss depending on the profits for each month.
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Create a balance sheet. Subtract your organization's assets from its liabilities, which can include rent fees and outstanding lines of credit. A surplus of funds is more favorable than a loss of funds.
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Compute future costs. Outline costs for receivables, such as inventory and equipment, as well as operating and salary obligations. Tell potential investors when you expect to receive this money and if any expected investments are currently guaranteed.
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Develop a contingency plan, which is a kind of debt repayment plan in the event of failure. Investors want to know how your organization will repay its outstanding debts if the organization closes or files for bankruptcy.
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Tips & Warnings
Provide investors and organizational leaders with copies of your financial plan.
