To them, the heart of your business plan is represented by the financial projections which must include income statements, balance sheets, and cash flow statements. These statements must convince your backers of two very important details: Profit, or net income, represents the difference between revenues and expenses for the specified period. An income statement presents the results of operations; that is, it reports, for a specific period of time, the items that comprise the total revenue and the total expense and the resulting net income.
Although your FICO score is important, many lenders and investors will also look at the other details in your credit information. For example, have you recently run up a lot of department store credit card debt?
Do you have many recent inquiries on your credit because you just refinanced your mortgage? Do you have any tax liens or legal judgments, such as child-support payments?
Do you have a history of overdue payments on credit cards or student loans? Have you faced a serious financial concern, such as a car repossession, house foreclosure or bankruptcy? These issues will not necessarily disqualify you from borrowing, but they do need to be presented in the most positive light to obtain funding.
Once you have a copy of your credit report, review it, paying attention to both the FICO score and the other details. If you discover that your credit report contains information that is in error, such as delinquent accounts that have since been paid, alert the concerned party or company to the error and go through their dispute resolution process to remove those items.
Keep in mind that this process can take business plan financial statements projections turning swirling months, which is why it pays to get your credit report before you try to obtain financing.
If you do have delinquent items that are unpaid, do your best to pay off the balance of the debt or come to a resolution with the party. Be prepared to explain all unresolved items or previous challenges on your report to the best of your ability.
While this may seem difficult, it is worth the effort. Your goal is to make it easy for your lender to believe that you represent the best opportunity to do that.
Find Financing Sources Once you have your business plan and financial information in order, you need to consider your choice of financing options. Your first option is to finance the studio using your own resources.
In addition to any cash you have on hand, consider the worth of other liquid assets, such as stocks, mutual funds, bonds or the cash value of an existing life insurance policy. Another personal source of revenue might be the equity in your home or even your retirement fund but you will pay a penalty for early withdrawal.
The advantage of using your personal assets as your primary source of funding is that you control the situation. No one can dictate how you allocate your assets to launch and operate your business.
The downside is that you can lose those assets or, at the very least, not have access to your funds for future opportunities e. If you have few liquid assets and little net worth, you might consider bringing in a business partner with stronger financial resources who can finance the studio or provide a comfort level to your lender.
As always, there is a cost and a benefit to this kind of partnership: Other excellent sources of funding are your family, friends, co-workers—even some of your clients.
The advantage to this type of arrangement is that the repayment terms for the loan are often more reasonable and flexible than with conventional financing. The possible challenge to this kind of relationship is that it is personal, and any future business disagreements could cause a strain in the relationship.
The success of any type of personal loan depends on your maintaining a good relationship with the individual s and on clearly defining the terms of the relationship so that everyone is in accord. Securing your loan through conventional sources, such as a bank, will usually require a more formal arrangement.
Each financing source will present its own unique advantages and disadvantages. For example, conventional banks rarely finance new businesses, but they will often let you take out a home equity loan at an attractive interest rate.
Compare that to SBA loans, which can be used for start-up costs but often require a significant amount of lead time and red tape to qualify for the funding. While there are other finance companies that do provide start-up financing, their rates and programs vary wildly, so do your homework before signing on the dotted line.
Another way to obtain funding for your studio is to use what is known as an angel investor. This can be a financially solid individual or company that seeks out small, emerging companies in which to invest.
Angel investors provide both capital and advice for either a fee or a percentage of company ownership.BUSINESS PLANNING TEMPLATE. COMPONENTS OF A BUSINESS PLAN.
1. Executive Summary. 2. Background. 3. Key Personnel You will need to include financial statements and projections for the past as well as next three to five years, including: After you have completed your business plan, have others review it before sending it to potential. The business plan financial section always starts with the forecasting of revenue.
Revenue refers to the monetary amount from the sale of goods or services in which the business normally trades and which are available for sale.
Download a free 5 Year Business Financial Projections to make your document professional and perfect. Find other professionally designed templates in TidyForm.
In the framework of a traditional strategic plan, the mission statement is concisely expressed in not more than one or two sentences, with value statements articulated separately.
However, some organizations combine the mission and values into a narrative of one or more paragraphs. A Sample Beef Cattle Farming Business Plan Template. Responsible for preparing financial reports, budgets, and financial statements for the organization; Responsible for financial forecasting and risks analysis.
Cattle Farming Business Plan – Financial Projections and Costing. Aug 11, · Creating financial projections is an important part of your startup’s business plan. If you’re seeking financing, financial projections help convince prospective lenders and investors that your business will be profitable by offering them a good return on their investment/5(41).