Financial Plans for small Business

4CEO | Because Business Is More than Luck

The business financial plan commonly appears in the overall business plan for a small business. However, the financial plan is a self-supporting document intended to support and direct the actions of the business. It explains what your business can afford, how it can afford to do it and what the expected profits will be. For a small business, a well-written business plan can be the difference between you carrying the business or the business carrying you.


Your small business financial plan should include four standard forms that attached documents support. The standard financial forms include the personal financial statement, the balance sheet, the income statement and the cash flow statement. These forms provide a well-rounded financial view of your business, from your personal finances to the business finances. The forms explain how your business generates income, how it spends the income and whether it can support itself.

Supporting Documents

The supporting documents of the financial plan are those that place merit into your financial figures. Depending on the information provided in your statements, these documents can include stock documents, life insurance policies, real estate deeds, tax statements, bank statements and register receipts and accounting ledgers. Within the business plan, these supporting documents are included in the document’s appendix and are organized in a fashion that provides easy reference.


You can easily go wrong with your financial plan if you simply pull out your documents and fill in the numbers. The financial plan is an analysis of your business that lenders and investors use to determine your business’ viability. The information within this plan helps determine your business’ financial ratios, or scorecards. Institutions and financial specialists use an array of ratios to identify the information they seek about your business. Some of the most common financial ratios include the liquidity ratios, such as the working capital and acid test, as well as the asset management ratios, such as the debt management ratios like the accounts payable turnover and leverage tests.


The break-even formula is one of the most important aspects of the small business financial plan. This formula uses the information within the income statement to determine the point at which your company begins to generate a profit. The break-even formula is the company’s fixed expenses divided by its margin percentage. The margin percentage is determined by subtracting your business’ total variable expense from its total net sales and then determining what percentage that margin represents. For instance, if your company has $100, 000 in net sales with $50, 000 in total variable expenses, the margin would be $50, 000, or 50 percent of the net sales. The break-even point of your business with $150, 000 in fixed expenses is $75, 000. Therefore, all business income you generate above $75, 000 is a profit.

2013-01-29 19:04:17 by SteelTigerDesigns

Raising Capital For Starting New Business

My name is James and I am looking for 20,000 people that will donate at least $1 (or more) to help me fund the start of my business. I have personally been a part of the creative process of my products for the last 13 years. It has always been a very small thing I do on the side but now I can grow it into something that will start me down the road of financial independence. I already have a marketing plan and a product that really sells both online and off. I already have reliable suppliers and other manufacturers. I simply need capital for a business license, to buy tools and supplies (on a large scale) and general business start up costs

2011-09-07 15:57:16 by President_Obama

Small business owners don't blame regulation

It's the demand, stupid.
Politicians and business groups often blame excessive regulation and fear of higher taxes for tepid hiring in the economy. However, little evidence of that emerged when McClatchy canvassed a random sample of small business owners across the nation.
McClatchy reached out to owners of small businesses, many of them mom-and-pop operations, to find out whether they indeed were being choked by regulation, whether uncertainty over taxes affected their hiring plans and whether the health care overhaul was helping or hurting their business

2012-11-27 08:37:32 by DecimusIuniusIuv

You seem grossly uninformed

Not everyone else is
Top Things to Know for Small Businesses
If you have up to 25 employees, pay average annual wages below $50,000, and provide health insurance, you may qualify for a small business tax credit of up to 35% (up to 25% for non-profits) to offset the cost of your insurance. This will bring down the cost of providing insurance.
Under the health care law, employer-based plans that provide health insurance to retirees ages 55-64 can now get financial help through the Early Retiree Reinsurance Program. This program is designed to lower the cost of premiums for all employees and reduce employer health costs

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