Starting a Business: The Business Plan (Pt.3)

Well this week I've been bombarded by finals at my college so I haven't been able to do as much posting as I would of liked. I'm going to begin to explain the first steps in the financial department of setting up a business plan.

A financial plan consists of many things. In this you're going to want to consider projections for income, expenses, and much more. This is the part where I would advise you to hire a professional accountant or financial analyst. However, if you're wanting to do it on your own here's a few tips.


You're going to need to produce projections for what you think your company can reach. I would advise to use a five-year projection plan but a three-year projection plan would most likely work fine. You need these projections for the income you feel you can have coming in, the expenses going out, and even funding sources that you might have got loans from. Now don't just go pulling some random number out of a hat like you're a magician. This takes research, and research is what you'll have to do. Find out historical and industry trends and follow their sales to try and get your projections.

Keep in mind, a financial plan for a business is almost never matched. It could be better, or it could be worse, depending on how much work and effort you put into the plan and follow accordingly. Once you make a financial plan, you need to do your best to stick to it and the keep the budget from drawing into debt.

I would tell most my readers here to, if anything, just expect the expected. If you want to take it further, expect the worst. This way, if the worst does happen, which we all hope it doesn't, then you were at least expecting it. This does happen, but just because it does doesn't mean you should give up! Reconstruct another one that you feel will work better for you. After all, by the time you find out if your first business plan was a success, you'll have experience to build your next one better either way!

I'm going to post the other part of my financial planning for the business plan tomorrow. It will be focusing more on loans and where new businesses can find loans.


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13 comments:

diane said...

Very good advice on a financial plan. And, yes, always expect the worst.

Mr. Wilson said...

for the Philippines, right now, i do think that business will not be a good venture to take..as of now..

anicam said...

useful information on financial plan. A better step to take.
keep it up

April said...

for mine, it is always a right, if the business doesn't work out it just something to do with your strategy. so maybe, just make strategy before you make business.

Jesse said...

That's the whole point of the business plan my dear :)

Bullgrit said...

Good advice, here. I just found your site, and now I'm going back through your previous posts. Thanks.

RabbleRouser said...

There is some very good advice. I would add though it may not be as good to expect the worst in your business proposal. Nothing turns a prospective financier off more then seeing how bad you could perform. The best thing to do is to plan and show that there is a market for the business and based on that statistical data show how you expect to perform and what type of revenues should be expected. I am not saying make it look all pie-in-the-sky because that can be seen right through, but don't go ahead and anticipate in your plan the coming of WW3, either.

Jesse said...

True enough.. I guess I didn't fully clarify myself on that part.. You need to be working your hardest, but don't just be expecting that everything will fall in lap. Rarely does that ever happen. A lot of times bad things will happen, even something outside the business that affects it, and in my opinion if you have expected the worst, then you should also be ready to adapt and change your ideas to make them work.

believer1984 said...

These business tips on your blog are excellent.

well done.

smile*

Fried Pal said...

nice business tips men! : )

Darmawan said...

Yup.. I agree
Think for the worst scenario is useful, don't just think for the profits only

Mr. Wilson said...

hehehe was here already..but considering the worst case is really a good thing to do..if you can survive the worst case, what more if its not..

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