How to Write a Business Plan

A credible financial plan will compare projected finances of the venture to that of similar existing businesses. The plan can be used as the basis for a detailed operating budget and to set objectives that must be achieved if the business is to be successful.

In essence, when you create financial assumptions for a business, you make the best assumptions possible about:

  • Revenue: Based on your market analysis and your marketing and sales strategy, estimate reasonable sales volume and revenue growth for the company over time.

  • Costs: There are three main types of costs to consider and include.

    • Start-up costs: These are expenses that must be incurred before the business starts operating, such as real estate or equipment purchases.

    • Fixed expenses: These are expenses that do not change, or vary, based on the amount of sales, such as insurance or professional services.

    • Variable expenses: These are expenses that fluctuate directly with the volume of business, such as labor or raw materials.

What are some common mistakes to look out for when putting together the Financials section
Paul Wimer
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An Investor's Perspective
"It's your job to show me that you've thought about all the ways your business might fail. Look at what happens to your financials as you change each of your major assumptions."

A Potential Investor Wants to Know

  • Is the profit picture for this enterprise credible?

  • What return will I earn on my investment?

  • When will I earn a return on this investment?

  • What is my potential exit plan?

  • How will I know if the investment is performing according to my expectations?