BUSINESS PLANS & FORECASTS
BUSINESS PLANS AND FORECASTS
Having a Business Plan coupled with a clear strategy to achieve the goals you set can be instrumental in the success of a business. With a firm Business Plan and strategy in place, you should create Financial Forecasts for both profits and cash flow. Here at Harvest Accountants, we have the management tools and experience to help you create a robust Business Plan and Financial Forecast which include meaningful key performance Indicators (KPI’s) and critical success factors (CSF’s) which are both financial and non-financial.
Business Plans and Financial Forecasts are often requested by banks, Investors, and other lenders when additional financing is required by a business.
WHAT IS A BUSINESS PLAN?
A Business Plan is a document setting out a business’s future objectives and strategies for achieving them. The business plan is a useful document that allows stakeholders to understand how the business intends to achieve its goals. It is good practice for organisations to repeat the business planning process every 3 to 5 years.
Business plans should always include Financial Forecasts including Profit and Loss and Balance Sheet Forecasts as well as a Cashflow projection.
Financial Forecasts are an important part of the Business Plan document. They are a prediction of the future finances of the business and can be compared with actual results to monitor progress, it is vital that you monitor your actual position against budgets and targets and adapt the strategy if needed.
Predicting the future finances of a business can be difficult but here at Harvest Accountants, we have the experience and tools to assist you to produce a robust profit and loss forecast and a cash flow forecast.
Financial forecasts may include:
- Start-up costs
- Capital expenditure
- Cost of goods sold (COGS)
- Cashflow projections
A Cashflow projection or forecast is a prediction of the money the business is expected to receive and payout over a period of time. It should include all expected receipts like sales income, borrowings from a bank, and Investments and compare these to the outgoings of the business such as wages, supplier payments, and rent. A Cashflow forecast enables a business to predict peaks and troughs in its cash balance, indicating when it may need to borrow funds or when it may be holding a high cash amount.
There are several benefits to be gained from creating and updating a Cashflow Forecast:
- Is great for planning your business activities and resources
- Ensures your business activities are correctly aligned with each other
- Supports you in making sensible, realistic decisions for your business
- Gives you greater control over your business finances
- Allows you to better understand your business performance
- Helps you plan for the future
A Cashflow Forecast is an essential business document for helping you keep on top of your finances. Many banks require forecasts before considering a loan.
NEED HELP PREPARING A BUSINESS PLAN AND FORECASTS?
If you would like some help building your business plan, setting KPIs and CSF’s that align with your strategy, and producing financial forecasts then please contact us, we would be delighted to assist you.