Getting Your Finances Right
For the majority of organisations, how you start out in your respective industry is what makes all the difference to your chances of success. Whether you are entering a fast paced marketplace or a specialist sector, writing a business plan is an essential part of getting the support you need to take your chosen industry by storm.
Whilst there are a number of resources online detailing what sections you should include within your business plan, one part in particular really strikes fear into many business owners – the financial forecast. Ironically this is one of the sections that any potential investors will go through with a fine tooth comb so ensuring it is on point and you get your finances right is vital. Whether you are looking to convince your bank, private investors, key suppliers or even customers, presenting your financial forecast and translating your business into figures could make or break your business.
Luckily we specialise in managing all aspects of business accounts on your behalf, and here we reveal our top tips for writing the financial forecast for your plan.
Understand its importance
It’s important to state that your financial forecast should not be a direct copy of your accounts, whilst you must include profit and loss, balance sheet and cashflow figures, a financial forecast is not just about the now, it’s about the future as the name suggests. Many refer to a financial forecast or projection as an ‘elaborate, educated guess’, but by enlisting an accountant to assist you with projections you can make your financial predications for the future as accurate and realistic as possible.
Know your investors
Whether you are pitching to your bank, venture capitalists, angel investors or family members, knowing what your investors want to see and giving it to them in a realistic way is the next step. The majority of investors want to see that your business will grow, and will be looking at how quickly you can achieve your projected figures.
What to include
Your financial forecast should be broken down; whilst your investors may look at hundreds of business plans a week, making it as easy to understand as possible is important and will show your head for figures, even if you got us to help! Your plan should include forecasts for:
- Profit and loss
- Balance sheets
As part of your forecast you should also provide your own financial requirements, detailing how much finance you want, when you’ll need it and what it will be used for within the business. You should also state what form you’d like the finance in, i.e. as a fixed interest loan or overdraft.
Need help writing your business plan? Contact our accountants today for a complete business planning service.