10 key points for a Financial Plan your online business
In here we know many entrepreneurs who have good business ideas and they understand well the market in which to compete. However, it is common for these entrepreneurs unknown or feel lost in the financial side of the company and have difficulties in constructing or analyzing a good financial plan for your company or business online. Is my business profitable? How do I make a feasibility study? How do I develop a business plan before creating my company? These are some of the questions most often recur when starting a business and consider the financial analysis.
In this post we want to help these entrepreneurs to make a financial plan with some examples and answer 10 key questions:
The main reasons for the need to make a financial plan for your new business are:
It is important not to obsess about the accuracy of the forecasts, the value of a financial plan is in the questions and reflections raised and the support it can give to our decisions.
Napoleon and Eisenhower used to say:
“The plan is useless, but planning is essential. ”
“The plan is useless, but planning is indispensable.”
The financial plan is part of the business plan. The business plan is a comprehensive document that describes and analyzes all aspects of the business: strategy, marketing, sales, purchasing, production, distribution, organization and includes financial course.
The basic elements of a business plan are:
It is very common also incorporate the following:
Often the entrepreneur is forced to make a financial plan in the format required by a third party: a bank, agencies such as Enisa, CDTI …
These models are always very similar and cover the accounting part of a financial plan, ie: income statement, balance sheet, and cash flows for three to five years. In this situation, we recommend taking the obligation to make these financial plans to model good financial key to our business. But ultimately always ends up covering the aforementioned accounting formats and analysis has an important value, we can get a lot out the model simply by linking the key indicators of our business with the accounting model.
For example, The line of business or sales figures we can calculate on the basis of our sales forecast for each product market segment and we have defined. We can also break it down into units and unit price …, all simulations allow us to detect weaknesses or at greatest risk in our business.
When you start to define how to perform an online store or any other online business many questions such as: how I can fanciest in the design or development of the platform, how to reserve for marketing, which sales need to recover the money, if I put a salary much can I charge, at what price and discounts can put to feasible … Obviously, there will never be a single answer to all these questions but the financial plan is an ideal tool to test all possibilities and minimize the risks of our release.
In the financial plans, many acronyms and names for many entrepreneurs are impossible to decipher handled. Some of them are:
If you are looking to sell our company or we admit new members, we need a starting point, most commonly used to evaluate how a company or startup is the “Valuation by discounted cash flow.” As the name suggests is based on knowing the case that each year will generate business and “deduct interest” or bring these amounts at present value. It is essential to have a good financial plan if we know the value of our company, working well the model can know which indicators are most may be affecting the value of the company.
To validate the reliability of a financial plan has to be analyzed separately:
In the first part, the data entered, there is no fixed for validation only a good knowledge of the industry, market and competition we will indicate whether the data are realistic or not rule.
Regarding the model calculations, it is important that we confirm an expert before you start using any model, which is well designed. It is common to find models where the income statement, balance sheet, and cash flow are not well connected to each other or simply operate independently, this and other design errors can make our projections are not consistent.
In order to start making a financial plan is required to gather the following information:
In the questions and answers above you can see that the realization of a good financial plan requires a combination of knowledge and skills:
Some entrepreneurs have on your computer with both profiles but it is very common that the entrepreneur knows the business but does not have the technical knowledge to make a financial plan. In these cases there is always the possibility of forming, but since we recommend that entrepreneurs focus on the business side that really dominates and relies on freelance professional experts for your financial plan.
Need more information to create your financial plan? Currently, you have a free counseling service which will help you select the best professional freelance for your draft financial plan.