Even though this part is at the end of your plan, the financial section of a business plan is the most important one, as it determines whether or not your idea is viable. If you manage to do this part correctly, you will not only know exactly what the risks are, but also how attractive the business concept you are about to develop will be in front of future investors. For those of you that have not started a business from scratch before, you should know that the financial plan section consists of three following financial statements: the income statement, the cash flow projection and balance sheet. In addition to that, a good section should also contain a short explanation and analysis of the previously mentioned statements.

Before getting to prepare those statements, there are some important steps you must take which will ensure that, in the end, you will have a correct and realistic business plan. Our advice is that you start the whole process by examining your expenses. If you wish to do this in the easiest way possible, break these expenses down into two categories: star up expenses and operating expenses. The start up expenses basically refer to the money you would have to pay to get your business up and running. This section will strongly depend on your idea for business, but it generally includes the following aspects: the fees you will have to pay to get your business registered, the amount that will be spent on licensing, certifications and permits, how much it is necessary to invest in a starting inventory, rent deposits, down payments on the property where the firm will be located, how much you will have to pay to get some pieces of equipment as well the fees for utilities.

Now let’s move to operating expenses, as these will be the ones that will keep your business running. To establish a perfectly reliable list, try to think of the things you will be spending your company’s budget on every month. One of the first thing you should consider is your salary and that of your employees, followed by rent, utilities, telecommunication bills, distribution costs, office supplies costs, as well as how much money you will spend on maintenance and storage. In addition to that, you should also estimate how much you will have to invest in promoting you activity and include the means by which that should be done. Try to find an efficient way of creating a name for yourself, by contracting some ad-space in a local newspaper or by creating a website where your internet-using clients will be able to find out all there is to know about your company. Once you are done with this, multiply this number by six, you will half a year estimate of your operating expenses.

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