DIP - Business Plan (E)

Lim Sei Kee @ cK

Allocate the time you need to do certain parts of the Business Plan

- Use calendar / Planner / Diary / Journal- Create a deadline for specific tasks

If you are doing in a group, allocate specific tasks for a specified person

Plan to make your Business Plan

Clear Concise Organized Well laid out Natural Positive Well interpreted facts Do not jump to conclusions Show sources Proofread Make it perfect

Writing tips

15 – 20 slides 15 – 20 minutes Keep it simple Make it to the point Tell a story Dress professionally Practice

◦ In front of mirror◦ In front of someone

Presentation Tips

Introduction (breaking the ice) Existing problem/pain/situation Solution (Product/service) you are providing Market research and strategy Who are involved How you can succeed

Tell a story

Its not just an idea, but a work in progress You have the numbers to back you up You have qualified people involved Be passionate in your presentation

Quick tips

Financial planning means to prepare the financial plan. [@ capital plan]

A financial plan is an estimate of the total capital requirements of the business.

Financial plan gives a total picture of the future financial activities of the business.

Introduction

Taking a commercial business as the most common organizational structure, the key objectives of producing a financial plan would be to:

• Create wealth for the business • Generate cash, and • Provide an adequate return on

investment

Financial Plan

Accounting looks back in time, starting today and taking an historical view.

Business planning or forecasting is a forward-looking view, starting today and going forward into the future.

FINANCIAL PLAN IS NOT ACCOUNTING

The working capital cycle

Inflows Outflows

Cash sales to customers

Receipts from customers who were allowed to buy on credit (trade debtors)

Investment by shareholders

Purchasing finished goods for re-sale

Purchasing raw materials needed for the manufacturing of the final product

Paying salaries and wages and other operating expenses

The business uses cash to acquire resources (assets such as stocks)

The resources are put to work and goods and services produced. These are then sold to customers

Some customers pay in cash, but others ask for time to pay. Eventually they pay and these funds are used to settle any liabilities of the business.

And so the cycle repeats

Cash flow can be described as a cycle:

The cash needed to make the cycle above work effectively is known as working capital.

Working capital is the cash needed to pay for the day to day operations of the business.

Financial statements: A. the income statement, B. the cash flow projection, and C. the balance sheet

PLUS, a brief explanation/analysis of these three statements.

3 important financial statements

The Income Statement shows your Revenues, Expenses, and Profit

Revenue - Expenses = Profit/Loss.

(A) Income Statement

(B) Cash flow projection Opening balance -How much cash business has at start

of time period

Cash inflows - How much cash is coming into business from product sales, sales of assets, loans from bank, and other sources of finance

Cash outflows - How much cash is going out of business, such as expenses, wages, raw materials, buying new machinery, and dividends

Closing balance - How much money is left at end of month

The Balance Sheet is the last of the financial statements that you need to include in the Financial Plan section of the business plan.

It summarizes all the financial data about your business, breaking that data into 3 categories; assets, liabilities, and equity.

(C) Balance Sheet

Assets are tangible objects of financial value that are owned by the company.

A liability is a debt owed to a creditor of the company.

Equity is the net difference when the total liabilities are subtracted from the total assets.

Start with a sales forecast. Create an expenses budget. Develop the three financial

statements.

Your financial plan: