Describe the sources and amount of your initial capital. Project monthly operating budget (income and expenses) for the first year. How does a start-up know what profits and sales will be? Public library reference sections have books that provide income statements and financial ratios by industry. One is RMA (Risk Management Association, formerly Robert Morris & Associates), which is also available for purchase online at www.rmahq.org. Bankers use this resource when evaluating the business plans of potential borrowers.
State the break-even point, expected return on investment and monthly cash flow for the first year. Include projected balance sheet of assets and liabilities. Address contingency plans if unexpected problems develop. Many experienced entrepreneurs give optimistic, expected and worst-case scenario budgets.
Name the person who will keep the company's accounting records and how they will be kept.
Include personal finance statements of owners and how each will be compensated. (Some plans place these statements in Supporting Documents.)
Explain how the business will be managed day to day. Discuss hiring and personnel procedures. List the insurance, lease or rent agreements, but put copies of the actual documents in the next section. List the equipment necessary to produce your products or services. Describe production and delivery of products and services.
This section should contain details of the previous sections, such as partnership agreement or articles of incorporation; pro forma profit and loss statements; copies of leases for building, office, shop, equipment etc.; copies of business license and other legal documents.
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