THE FINANCIAL PLAN

This must be your best estimate of the business potential and financial timetable.

You must be creative and show more than one approach to financing and launching the business. Prepare financial statements based on monthly "cash flow" for about 36 months. Once you start to develop your real-time cash flow charts your cash and asset requirements start to solidify and the planning becomes very meaningful. Your assumptions will be tested. Your sales projections, profitability and break-even schedules will begin to prove the feasibility of the business.

Actual Income Statements and Balance Sheet
Show (by month) the last three years (include current year) for an existing business.

Pro Forma Income Statements
These are projections of the "numbers" of the business and are the beginning of the reality check. Once you have established 36 months of "normal" analysis charts you will be able to test previously defined risks and financial problems.

Pro Forma Balance Sheet
To familiarize yourself with various scenario results prepare a balance sheet template and do monthly analysis of these scenarios. A set of income statements tied to monthly balance sheets is an excellent tool.

Pro Forma Cash Flow Analysis
Tie these cash flow analysis spreadsheets and charts to the income statements and balance sheets.

Break-even Chart and Calculation
These charts and calculations can be part of the overall analysis process described above.

Cost Control
The who, when, where, why and how of controls should be defined here and how it ties into the analysis process.

Highlights
Define all the major highlights described throughout this document and show their timing. These should all be tied to the analysis charts.