Writing a Business Plan: A Template (Part 6)

The continuation on the ongoing series of articles on writing an effective business plan picks up with a discussion on Business Operations and Financial Forecasts.

Business Operations

This is a corollary section to the previous Management and Workforce section. In this section you can discuss how your resources, your workforce and your manufacturing and distribution processes will work together to form a cohesive business process from the initial point of the manufacturing process to the end point, which could be the purchase of the product or service by the end consumer.

You can detail each step of the business process but remember to avoid resorting to using technical jargon or highly technical descriptions in your explanations. Create a clear picture that can be easily understood by the common layman.

You can also discuss any future additions to your operations in terms of machinery, people, IT systems, etc. Try to justify why these additions are going to be crucial in ensuring the achievement of your business goals and objectives.

Financial Forecasts

The Financial Forecasts section will give you the chance to show prospective investors how you foresee the profit generation of your future business as well as the expenses you may likely incur while in pursuit of your business objectives.

A good way to present this section would be to present the readers of your business plan with a financial analysis. An effective financial analysis can help give structure to an otherwise figures-heavy financial presentation.

The financial analysis of your proposed business can include the following information:

Previous Profit and Loss Statement. If you have had previous business or trading experience with another personally-owned and operated company, a short company history of your finances with that company can help investors gauge their projections on your future success. The Profit and Loss Statement you provide paints a picture of your company’s trading performance history over a set period of time inclusive of the company’s income, sales, and expenditure.

Previous Balance Sheet. Provide this document only if, similar to the situation above, you have had previous trading experience with another personally-owned or operated company. The Balance Sheet is considered a good overview of your previous company’s assets and liabilities. It also provides a historical perspective to which future business projections are going to be based. Always remember that your total assets must always equal to your total liabilities.

Fixed and variable cost projections. Putting together a projection on your start-up company’s fixed and variable costs and paired with your projected sales figures will provide you with a definite figure for your business’ break even point – that is, the point at which your business will start turning in a profit.

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