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All in the numbers: Financials for your business plan

June 7, 2012 - Tags: Planning

Shutterstock 9521440This guest blog post is provided by the Atlantic Canada Opportunities Agency who is responsible for creating opportunities for economic growth in Atlantic Canada.

The financial section of your business and marketing plan is all about the numbers. Investors are looking for accurate and understandable information that will clearly show them your bottom line.

With this in mind, you want to present your business idea as an attractive investment opportunity. The following are some suggestions for items to include in this section: 

  • The total amount of required funding for your business
  • Your use of funds, such as equipment, renovations, inventory and working capital
  • Your sources of funds, such as owner's investment, mortgage and term loans
  • The projected date when lenders can expect repayment
  • Any liability limits and insurance coverage necessary to handle environmental and other risks
  • Your projected return on investment
  • Economic assumptions (inflation, economic trends, interest rates) that affect your estimates and forecasts
  • An approximate timeline for return on investment

In the more detailed data portion of your financial section, it's also a good idea to present the dollar details of your business using standard financial statements and charts, and include information on:

  • Your market share (determined by dividing your sales by total market sales)
  • Your breakeven analysis (which determines at which sales volume your business will start making money)
  • Your return on investment (which lets you show your efficient use of assets)
  • Your cash flow (which lets you show if your company will have enough money to meet its needs on a monthly basis)
  • Your income statement (which reveals whether your business has earned a profit or has suffered a loss after a specified period)
  • Your balance sheet (which is a “snapshot” of what you own and what you owe)

Be sure to visit ACOA.gc.ca to access sample financial statements and charts and to find out more about other items worth covering in your financial section such as recording sales, loan proceeds, and accounts payable.

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