Business Plan

Contents

Purpose of The Business Plan

Executive Summary
Vision
Mission
Market Analysis
Competitive Analysis
Strategy
Products/Service
Sales and Marketing
Operations
Financials
2
 Purpose of The Business Plan

A business plan should be a realistic view of the expectations and long-term objectives for an
established business or new venture. It provides the framework within which it must operate and,
ultimately, succeed or fail. For management or entrepreneurs seeking external support, the plan is the
most important sales document that they are ever likely to produce as it could be the key to raising
finance etc. Preparation of a comprehensive plan will not guarantee success in raising funds or
mobilizing support, but lack of a sound plan will, almost certainly, ensure failure.

Just as no two businesses are alike, so also with business plans. As some issues in a plan will be
more relevant to some businesses than to others, it is important to tailor a plan's contents to suit
individual circumstances. Nonetheless, most plans follow a well-tried and tested structure.

It serves four critical functions as follows:

 Helps management or an entrepreneur to clarify, focus and research their businesses or

project's development and prospects.
 Provides a considered and logical framework within which a business can develop and pursue
business strategies over the next three to five years.
 Serves as a basis for discussion with third parties such as shareholders, agencies, banks,
investors etc.
 Offers a benchmark against which actual performance can be measured and reviewed.

Importance of the Business Planning Process

Preparing a satisfactory business plan is a painful but essential exercise. The planning process forces
managers or entrepreneurs to understand more clearly what they want to achieve, and how and when
they can do it. Even if no external support is needed, a business plan can play a vital role in helping
to avoid mistakes or recognize hidden opportunities.

For many, many entrepreneurs and planners, the process of planning (thinking, discussing,
researching and analyzing) is just as, or even more, useful than the final plan. So, think carefully
about going through the planning process. It could be enormously beneficial to your business.

"Fail to plan can mean plan to fail"

Anticipate many weeks of hard work and several drafts of the emerging plan to get the job right. A
clearly written and attractively packaged business plan will make it easier to interest possible
supporters, investors etc. A well-prepared business plan will demonstrate that the managers or
entrepreneurs know the business and that they have thought through its development in terms of
products, management, finances, and most importantly, markets and competition.
3
Main Lessons to be Learnt for Business Planning

The principal lessons for business planners include the following:

1. Decide the underlying purpose of the plan at the very beginning - to raise money, secure
approval etc. - as this will largely determine the comprehensiveness and length of the plan,
amount of research required, use of external help and overall time scale.

2. From the start, specify the structure of the plan in the form of a detailed table of contents. Use
this to identify critical issues requiring research and/or external assistance.

3. Create a work program and timetable which allows adequate time for researching, writing
and redrafting.

4. Recognize that the process could be much more difficult than expected and consider seeking
external assistance, sooner rather than later, for the most vital areas.

5. The more important the plan, the longer it will be and the longer it will take to complete.

Keys to Better Business Plans

 Use a business plan to set concrete goals, responsibilities, and deadlines to guide your
business.
 A good business plan assigns tasks to people or departments and sets milestones and
deadlines for tracking implementation.
 A practical business plan includes 10 parts implementation for every one part strategy.
 As part of the implementation of a business plan, it should provide a forum for regular review
and course corrections.
 Good business plans are practical.

"Fail to plan can mean plan to fail"

Business Plan "Don'ts"

 Don't use a business plan to show how much you know about your business.
 Nobody reads a long-winded business plan: not bankers, bosses, nor venture capitalists.
Years ago, people were favorably impressed by long plans. Today, nobody is interested in a
business plan more than 60 pages long.

"Fail to plan can mean plan to fail"

4
 Executive Summary

The executive summary is the most important section of your business plan. It provides a concise
overview of the entire plan along with a history of your company. It's the first thing your readers see;
therefore it is the thing that will either grab their interest and make them want to keep reading or
make them want to put it down and forget about it. More than anything else, this section is important
because it tells the reader why you think your business idea will be successful due to your primary
success factors. Primary success factors might include a superior ability to satisfy your customers'
needs, highly efficient methods of delivering your product or service, outstanding personnel, or a key
location. Each of these would give your business a competitive advantage.

The executive summary should be the last section you write. After you've worked out all the details
of your plan, you'll be in a better position to summarize it. If you're just starting a business, focus on
your experience and background as well as the decisions that led you to start this particular
enterprise. Include information about the problems your target market has and what solutions you
provide. Tell your reader what you're going to do differently or better. Convince the reader that there
is a need for your service or product.

Describe Your Company

Write about your company's story, be specific about the areas you will need to cover, you will want
to keep it lively and interesting. Some areas you should include are:

 What type of business is it? Wholesale? Retail? Manufacturing? Service?

 When was the company founded? Is it a start-up, or an established enterprise? What is the
story behind the founding of the company?

 What is your business' legal structure? Sole proprietorship? Corporation? Partnership?

 What market needs will you meet? Who will you sell to? How will your product(s) or
service(s) be sold?

"Fail to plan can mean plan to fail"

5
 Vision

Your business description is your corporate vision, and includes: who you are, what you will offer,
what market needs you will address, and why your business idea is practical.

Too many business owners make the mistake of operating without a vision; a situation which delays
their business' ability to grow and prosper. A business owner without a vision will have difficulty
describing his or her business and will provide a long, confused description, or a collection of
incomprehensible language when asked for one. A concise, easy-to-understand description of your
company will not only help your business plan, but will benefit you in any number of other day-to-
day situations.

"The successful man is the one who finds out what is the matter with his
business before his competitors do"
6
 Mission

Use the mission statement to define your business concept. A company's mission statement should
define underlying goals (such as making a profit) and objectives in broad strategic terms, including
what market is served and what benefits are offered. Also, it explains the power of your business. It
could be two sentences or a paragraph. It should be as direct and focused as possible, and it should
leave the reader with a clear picture of what your business is all about.

"The successful man is the one who finds out what is the matter with his
business before his competitors do"
7
 Market Analysis

This section is designed to provide enough facts to convince an investor, potential partner or
other reader that your business has enough customers in a growing industry, and can garner sales
despite the competition. It is one of the most important parts of the plan, taking into account
current market size and trends, and may require extensive research. Many of the sections that
follow - from manufacturing to marketing to the amount of money you need - will be based on
the sales estimates you create here.

Market Size/Trends

This section defines the total market size as well as the slice of the market your business will target.
Use numbers as well as trend information to make a case for a viable current market and its growth
potential.

After you define the total market, create a description of your target market by using geography,
company size, business organization, lifestyle, sex, age, occupation, and other characteristics to
describe the companies or consumers likely to buy your product or service.

Tips

 When discussing any market size, be sure to talk about factors affecting market growth,
socioeconomic trends, government policy, population shifts, and the like. Show how these
trends will have a positive or negative impact on your specific business.

 Remember to cite all sources for your data. This will prove that you've done your
homework, and will assure the reader of your plan that your information comes from a
reliable source.

"The successful man is the one who finds out what is the matter with his
business before his competitors do"
8
 Customers

It is important to be thorough and specific when creating a description of the target customer for your
product or service. This description defines the characteristics of the people you want to sell to and
should indicate, among other things, whether your customers are cost or quality conscious, under
what circumstances they buy, and what types of concerns they have. If you have an existing
business, list your current customers and the trend in your sales to them.

Tips

 A common mistake is to describe customers in general terms, such as all "people who want
to buy a bicycle", therefore make a list of the characteristics of the people or companies that
will buy your product or service.

 Be sure to include details of what geographic region you plan to sell to. Is your market
national, regional, international, or local?

"The successful man is the one who finds out what is the matter with his
business before his competitors do
9
 Competitive Analysis

The Industry

Begin your chapter with a brief overview of the industry you will be competing in. Ultimately, you
want to demonstrate that you are in a "hot" industry with an excellent long-term outlook. Discuss
both the present situation in the industry, as well as future possibilities.

Tips

 Describe your industry like you're telling a story. Grab the reader's attention
with strong, exciting language that will get them interested in your industry
and your business.
 Provide an overview of the industry in which you and other companies will
compete.

 Many business plans make the mistake of basing their market observations on
assumption. Instead, you will want to research your industry and back up your
observations with facts. Be sure to note all sources.

 General business newspapers and magazines and trade newspapers and

magazines as well as researches, report industry-wide trends as well. So you
use those as references for gathering data, besides you might include a copy of
these articles in your business plan appendix.

 Don't be afraid to include negative information about your industry. Discussing

the possible roadblocks your company might face shows you have a realistic
view of the market.

"Every moment is a golden one for him who has the vision to recognize it as such"
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Nature of Competition

The competition section indicates where your products or services fit in the competitive
environment. Presenting your business in the landscape of its competitors proves that you understand
your industry and may be prepared to cope with some of the barriers to your company's success.

Present a short discussion of each of your primary competitors. If possible, include their annual sales
and their market share. Each assessment should include why these companies do or do not meet their
customers' needs. You should then explain why you think you can capture a share of their business.

Strengths and weaknesses can fall into a number of different categories. Sales, quality, distribution,
price, production capabilities, image, and breadth of products/services are all ways companies
differentiate themselves. Ask yourself: Who is the price leader? Who is the quality leader? Who has
the largest market share? Why have certain companies recently entered or withdrawn from the
market? These factors are critical to a successful competitive analysis.

Tips

 Never say "we have no competition." Lenders won't believe you. Even if your product or
service is truly innovative, you need to look at what else your customers could buy instead.
Remember, the first personal computer competed with calculators and typewriters; the first
calculator competed with slide rules.

 Your competitors won't always be immediately evident, since they don't necessarily provide
the exact same product or service as you do. If you sell gourmet salsas, you will be
competing with other salsa makers, and you also might compete with makers of gourmet
ketchup, mustards, and other condiments. List these as "indirect competitors."

 Many business plans fail to give a realistic view of their true competitive universe by
defining the competitive field too narrowly. Think as broadly as possible when devising a
list of competitors by characterizing competitors as any business customers may patronize
for similar products or services. A local florist obviously competes with other flower shops,
but must also contend with delivery services and supermarkets that carry flowers and plants.

"

Every moment is a golden one for him who has the vision to recognize
it as such"
11
 To determine your competitors' strengths and weaknesses, evaluate why customers buy from
them. Is it price? Value? Service? Convenience? Reputation? Very often, it's "perceived"
strengths rather than "actual" strengths that you will be evaluating.

 A table can be a good way to present your competitive analyses, since it will allow your
competition to be evaluated at a glance. Columns should include the names of your
competitors and rows should detail market share or position, annual sales (if available),
strengths, weaknesses, and comments.

Tips

 To create a list of your competitors' strengths and weaknesses, look at

areas such as distribution, pricing, value, service, timeliness. If you
were undertaking market research, for example, you would look at
depth of research, price, and frequency of survey, add-on services,
and reputation in the marketplace. A dry cleaner would look at
pricing, location, services such as delivery, hours of operation, quality
of their cleaning, whether or not they are computerized and if they
provide services such as tailoring and mending.

 If appropriate, research your competitors in trade magazines to

nearth their strengths and weaknesses.

advantages which you, too, can provide. The strengths of your

competitors may take many forms, but the most common include:
Note

 The strengths of your competitors are also competitive advantages which you, too, can
provide. The strengths of your competitors may take many forms, but the most common
include:
 An ability to satisfy customer needs
 A large share of the market and the consumer awareness that comes with it
 A good track record and reputation
 Solid financial resources and Key personnel
 Weaknesses are simply the flip side of strengths. In other words, analyze the same areas as
you did before to determine what your competitors' weaknesses are. Are they unable to
satisfy their customers' needs? Do they have poor market penetration? Is their track record
or reputation not up to par? Do they have limited financial resources? Can they not retain
good people? All of these can be red flags for any business. If you find weak areas in your
competition, be sure to find out why they are having problems. This way, you can avoid the
same mistakes they have made.

"Every moment is a golden one for him who has the vision to
12
 recognize it as such"

 If your target market is not important to your competition, then you will most likely have an
open field to run in if your idea is a good one - at least for a while. However, if the
competition is keen for your target market, be prepared to overcome some barriers. Barriers
to any market might include:
 A high investment cost
 The time it takes to set up your business
 Changing technology
 The lack of quality personnel
 Customer resistance (i.e., long-standing relationships, brand loyalty)

"Every moment is a golden one for him who has the vision to recognize
it as such"
13
 Strategy

Describe your most important company strengths and core competencies. What factors will make the
company succeed? What do you think your major competitive strengths will be? What background
experience, skills, and strengths do you personally bring to this new venture? The following are
different kinds of strategies that you could use.

- Customer Service
- Development
- Production
- Management Considerations
- Operations
-Quality Control
-Sales Promotion efforts
- Manufacturing Cost per Unit
-Financials
-Marketing Strategy
-Customer Loyalty

"Here is the test to find whether your mission on earth is finished. If you're alive, it
isn't"
14
 Products or Services

Describe each of your products or services with a particular focus on how it will be used. Go into as
much detail as necessary for the reader to get a real flavor for what you are selling. What are the
applications and the end uses? Underscore the specific features or variations that your products have.

Tips

-Focus on why will your products or services be successful in the marketplace?

There are any number of reasons you can use - it's a well-organized business, we
use state-of-the-art equipment, the market is ready for our product, its a great
product at a fair price, etc.

-If you are selling a product, you may want to include full specifications. If
available, include a quality photograph as well.

-Be specific in describing your competitive edge. Don't just say something like "we
intend to provide better service." Explain how you will do so, and why that sets you
apart from your competitors.

Positioning
Positioning is your identity in the marketplace: how you want the market and your
competitors to perceive your product or service. Your positioning is based on your
customers and competition.

If you run a dry cleaning business you can be the fastest, the most dependable, the
cheapest, or the business providing the best service. A mail-order gift business can
emphasize price, convenience, a flexible returns policy, unique products, or some
combination of these. A hairdresser may be positioned as hip, traditional,
pampering, inexpensive, or convenient. You may think that positioning is based on
image. Develop your position by answering the following questions with brief,
direct statements:

-What is unique about your product or service?

-What customer needs does your product fulfill?
-How do you want people to view your products or services?
-How do your competitors position themselves?

"Here is the test to find whether your mission on earth is finished. If

you're alive, it isn't"
15
 Sales and Marketing

Marketing Strategy

Marketing is the process of creating customers, and customers are the lifeblood of
your business. In this section, the first thing you want to do is define your marketing
strategy. There is no single way to approach a marketing strategy; your strategy
should be part of an ongoing self-evaluation process and unique to your company.
However, there are steps you can follow which will help you think through the
strategy you would like to use.

Pricing

Discuss what you will charge for your product or service and how you derived the
price. For example, a luxury gift importing business sets prices to cover costs and
make a profit but to position products as luxury items. A printing shop with a good
location charges slightly more than its competition because it has a convenient
location and it has determined that the market will bear the higher price.

Once you have briefly explained your pricing and rationale, discuss where this
pricing strategy places you in the spectrum of the other providers of this product or
service. Next, explain how your price will get the product or service accepted,
maintain and hopefully increase your market share in the face of competition, and
produce profits.

Tips

o If you charge more than competitive existing products, you will need to
ustify the higher price on the basis of newness, quality, warranty, and/or
service.

or service, explain how you will maintain profitability. This may happen
through more efficient manufacturing and distribution, lower labor costs,
lower
o If overhead,
a price will beor lower
lower material
than thatcosts.
of an existing, competing, product or
service, explain how you will maintain profitability. This may happen
through more efficient manufacturing and distribution, lower labor costs,
lower overhead, or lower material costs.

"Here is the test to find whether your mission on earth is finished. If

you're alive, it isn't
16
 Channels of Distribution

Choices for distribution channels could include: original equipment manufacturers,

an internal sales force, distributors, or retailers.

Communication

How are you going to reach your customers? Usually some combination of the
following works the best: promotions, advertising, public relations, personal selling,
and printed materials such as brochures, catalogs, flyers, etc.

Sales

 A sales force strategy. If you are going to have a sales force, do you plan to
use internal or independent representatives? How many salespeople will you
recruit for your sales force? What type of recruitment strategies will you
use? How will you train your sales force? What about compensation for your
sales force?
 Your sales activities. When you are defining your sales strategy, it is
important that you break it down into activities. For instance, you need to
identify your prospects.

"Here is the test to find whether your mission on earth is finished. If you're alive, it
isn't"
17
 Operations
Organization & Management

This section should include: your company's organizational structure, details about the ownership of
your company, your management team, and the qualifications of your board of directors.

Who does what in your business? Why are you bringing them into the business as board members or
employees? What are they responsible for? These may seem like unnecessary questions to answer in
a one- or two-person organization, but the people reading your business plan want to know who's in
charge, so tell them. Give a detailed description of each division or department and its function.

What kind of salary and benefits package do you have for your people? What incentives are you
offering? How about promotions? Reassure your reader that the people you have on staff are more
than just names on a letterhead.

Organizational Structure

A simple but effective way to lay out the structure of your company is to create an organizational
chart with a narrative description. This will prove that you're leaving nothing to chance, you've
thought out exactly who is doing what, and there is someone in charge of every function of your
company. To a potential investor or employee, that is very important.

Human Resources Plan

Discuss the positions that need to be created and filled, salary and benefits offered, and training plans
that you will make to develop your employees.

Product/Service Delivery

Mention how your product/service delivery would be different from others. If you're going to use
standards, then describe which you will use. You have to show that your customer will receive his
product in a short time, and that you target customer satisfaction.

"The person who knows how will always have a job. The person who
knows why will always be his boss"

Customer/Service Support
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Any successful business requires excellent customer service. If you want to be successful too, then
describe what you will do to have a good customer service. How will you handle problems and
complaints? What will you do to get customer feedback?

Facilities

Where are you going to locate your business? What are the advantages and disadvantages of such
location? What kind of equipment or tools will you use? If you need to buy furniture, what furniture
would you get?

"The person who knows how will always have a job. The person who
knows why will always be his boss"
19
 Financials

Startup Costs

To determine your startup costs, you must identify all the expenses your business will incur during
its startup phase. Some of these expenses will be one-time costs, such as the fee for incorporating
your business and the price of a sign for your building. Some expenses will be ongoing, such as the
cost of utilities, inventory, insurance, etc.

While identifying these costs, decide whether they are essential or optional. A realistic startup budget
should only include those elements that are necessary to start the business. These essential expenses
can then be divided into two separate categories: fixed (overhead) expenses and variable (related to
business sales) expenses. Fixed expenses will include figures like the monthly rent, utilities, and
administrative and insurance costs. Variable expenses will include inventory, shipping and
packaging costs, sales commissions, and other costs associated with the direct sale of a product or
service.

"Finance is the art or science of managing revenues and resources for

the best advantage of the manager"
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Balance Sheet

The balance sheet shows the company's financial position, what it owns (assets) and what it owes
(liabilities and net worth). The bottom line of a balance sheet must always balance (i.e. assets =
liabilities + net worth). The individual elements of a balance sheet change from day to day and
reflect the activities of the company. Analyzing how the balance sheet changes over time will reveal
important information about the company's business trends. Liabilities and net worth on the balance
sheet represent the company's sources of funds. Liabilities and net worth are composed of creditors
and investors who have provided cash or its equivalent to the company in the past. As a source of
funds, they enable the company to continue in business or expand operations. If creditors and
investors are unhappy and distrustful, the company's chances of survival are limited. Assets, on the
other hand, represent the company's use of funds. The company uses cash or other funds provided by
the creditor/investor to acquire assets. Assets include all the things of value that are owned or due to
the business.

Liabilities represent a company's obligations to creditors while net worth represents the owner's
investment in the company. In reality, both creditors and owners are investors in the company; the
only difference is the degree of nervousness and the time frame in which they expect repayment.

Assets

As noted previously, anything of value that is owned or due to the business is included under the
assets section of the balance sheet.

Current Assets

Current assets are those which mature in less than one year. They are the sum of the following
categories:

 Cash
 Accounts Receivable (A/R)
 Inventory (Inv)
 Notes Receivable (N/R)
 Prepaid Expenses
 Other Current Assets

"Finance is the art or science of managing revenues and resources for

the best advantage of the manager"
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Fixed Assets

Fixed assets represent the use of cash to purchase physical assets whose life exceeds one year. They
include assets such as:

 Land
 Buildings
 Machinery and Equipment
 Furniture and Fixtures

Liabilities and Net Worth

Liabilities and net worth are sources of cash listed in descending order from the most nervous and
current creditors to mature obligations (current liabilities) to the least nervous and never due
obligations (net worth). There are two sources of funds: lender-investor and owner-investor. Lender-
investor consists of trade suppliers, employees, tax authorities, and financial institutions. Owner-
investor consists of stockholders and principals who loan cash to the business.

Current Liabilities

Current liabilities are those obligations that will mature and must be paid within 12 months. These
are liabilities that can create a company's insolvency if cash is inadequate. A happy and satisfied set
of current creditors is a healthy and important source of credit for short-term uses of cash (inventory
and receivables). An unhappy and dissatisfied set of current creditors can threaten the survival of the
company. The best way to keep these creditors happy is to keep their obligations current. Current
liabilities consist of the following obligation accounts:

 Accounts Payable (A/P)

 Accrued Expenses
 Notes Payable - Bank (N/P Bank)
 Notes Payable - Other (N/P Other)

Total Liabilities

Total liabilities represent the sum of all monetary obligations of a business as well as all claims
creditors have on its assets.

Equity

Equity is represented by total assets minus total liabilities. Equity or net worth is the most patient and
last to mature source of funds. It represents the owner's share in the financing of all assets.

"Business? It's quite simple. It's other people's money"

22
 This automated form is made available compliments of CCH Business Owner's Toolkit

[Your Business Name]

Balance Sheet
[Mmmm Dd, 200X]

Assets

Current Assets:
Cash $0
Accounts Receivable $0
Less: Reserve for Bad Debts 0 0
Merchandise Inventory 0
Prepaid Expenses 0
Notes Receivable 0
Total Current Assets $0

Fixed Assets:
Vehicles 0
Less: Accumulated Depreciation 0 0

Furniture and Fixtures 0

Less: Accumulated Depreciation 0 0

Equipment 0
Less: Accumulated Depreciation 0 0

Buildings 0
Less: Accumulated Depreciation 0 0

Land 0
Total Fixed Assets 0

Other Assets:
Goodwill 0
Total Other Assets 0

Total Assets $0

Liabilities and Capital

Current Liabilities:
Accounts Payable $0
Sales Taxes Payable 0
Payroll Taxes Payable 0
Accrued Wages Payable 0
Unearned Revenues 0
Short-Term Notes Payable 0
Short-Term Bank Loan Payable 0
Total Current Liabilities $0
23
Long-Term Liabilities:
Long-Term Notes Payable 0
Mortgage Payable 0
Total Long-Term Liabilities 0

Total Liabilities 0

Capital:
Owner's Equity 0
Net Profit 0
Total Capital 0

Total Liabilities and Capital $0

"Business? It's quite simple. It's other people's money"

24
Income Statement

Known also as the profit and loss statement, the income statement shows all income and expense
accounts over a period of time; that is, it shows how profitable the business is. This financial
statement shows what how much money the company will make after all expenses are accounted for.
Remember that an income statement does not reveal hidden problems like insufficient cash flow
problems. Income statements are read from top to bottom and represent earnings and expenses over a
period of time.

"Business? It's quite simple. It's other people's money"

25
 This automated form is made available compliments of CCH Business Owner's Toolkit

[Your Company Name]

Income Statement
For the Year Ended [Mmmm Dd, 200X]

Revenue:
Gross Sales $0.00
Less: Sales Returns and Allowances $0.00
Net Sales $0.00

Cost of Goods Sold:

Beginning Inventory $0.00
Add: Purchases $0.00
Freight-in $0.00
Direct Labor $0.00
Indirect Expenses $0.00
$0.00
Less: Ending Inventory $0.00
Cost of Goods Sold $0.00

Gross Profit (Loss) $0.00

Expenses:
Advertising $0.00
Amortization $0.00
Bad Debts $0.00
Bank Charges $0.00
Charitable Contributions $0.00
Commissions $0.00
Contract Labor $0.00
Credit Card Fees $0.00
Delivery Expenses $0.00
Depreciation $0.00
Dues and Subscriptions $0.00
Insurance $0.00
Interest $0.00
Maintenance $0.00
Miscellaneous $0.00
Office Expenses $0.00
Operating Supplies $0.00
Payroll Taxes $0.00
Permits and Licenses $0.00
Postage $0.00
Professional Fees $0.00
Property Taxes $0.00
Rent $0.00
Repairs $0.00
Telephone $0.00
Travel $0.00
Utilities $0.00
Vehicle Expenses $0.00
Wages $0.00
26
 Total Expenses $0.00

Net Operating Income $0.00

Other Income:
Gain (Loss) on Sale of Assets $0.00
Interest Income $0.00
Total Other Income $0.00

Net Income (Loss) $0.00

"Business? It's quite simple. It's other people's money"

27
Cash Flow Statement

A cash flow statement measures cash flow over time. During your first year in business, you should
include a month-by-mon t
hc as hf
low state
me nti ny ourb usinesspl an .Ify ou’ res eekingal oan,an
impor tantf eatureofy ourc as hf
low stat
eme nti stha ti
twi l
ls how t hel ende re xactl
yh ow y ou’re
going to afford loan payments.

"Business? It's quite simple. It's other people's money"

28
 [Month] [Month] [Month] [Month] Total
nning Cash Balance $0 $0 $0
Inflows (Income):
ts. Rec. Collections 0
n Proceeds 0
s & Receipts 0
er:
0
0
otal Cash Inflows $0 $0 $0 $0 $0
lable Cash Balance $0 $0 $0 $0
Outflows (Expenses):
ertising 0
k Service Charges 0
dit Card Fees 0
very 0
lth Insurance 0
rance 0
rest 0
ntory Purchases 0
cellaneous 0
ce 0
roll 0
roll Taxes 0
essional Fees 0
t or Lease 0
scriptions & Dues 0
plies 0
es & Licenses 0
ities & Telephone 0
er:
0
0
0
ubtotal $0 $0 $0 $0 $0
er Cash Out Flows:
ital Purchases 0
n Principal 0
ner's Draw 0
er:
0
ubtotal $0 $0 $0 $0 $0
otal Cash Outflows $0 $0 $0 $0 $0
nding Cash Balance $0 $0 $0 $0
29