Business planning - Financial planning

Introduction

A key element of planning is financial planning. Most businesses will need to borrow to set-up and this will mean developing a financial plan. This will be required by most lenders before they will decide whether to lend to you. In this section we look at how you can go about preparing a financial plan - from calculating break-even output, through to the preparation of cash flow forecasts and projected balance sheets and profit and loss accounts. Follow the links below to look in more detail at each of the steps necessary to prepare a financial plan.

• Step 1 - Break-even - how many of your product will you need to sell before you break-even?
• Step 2 - Cash flow forecasting - a vital element of a financial plan is the development of a cash flow forecast. This can help identify how much money you may need to borrow and more importantly - when you may need it.
• Step 3 - Financial statements - you will also need to produce a projected balance sheet and profit and loss account to show the expected financial performance of your business. How do you go about producing these and what are they?

There is a business planning case study that you may like to have a go at when you have looked through each of these sections.