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?