Your business plan should include the following:
- Statement of organization and objectives.
- Identify products and services.
- Marketing plan and strategy.
- Identify competitors and how the business will successfully compete with them.
- Backup plan.
- Cash flow projections.
Completing cash flow analysis and projections
- Typically, the more detailed cash flow projections are, the better. Detailing expenditures can trigger other thoughts. Avoid lumping expenses into one category.
- Generally, a three-year projection is the minimum.
- How much cash must be generated to service any purchase money debt?
- Can the business generate a reasonable return for the owners?
- Does the cash analysis take into consideration the differences that will exist for a new owner?
- Has enough “cushion” been established for unforeseen expenditures and problems?
- Is there sufficient cash to replace obsolete and worn out equipment?
- Have all taxes been accounted for including income, payroll, property, and sales?
- What is the cash flow breakeven point?