6. Financial projections

This is the most daunting part of writing your business plan, but you can download various free templates on the internet that should help you with the structuring of it. Your plan should cover at least a three year period, with the most detail showing for the first year.

Create a separate spreadsheet for each of the following:

• Cash flow plan (your cash balance and monthly flow patterns, considering all outgoings)
• Profit & Loss (the level of profit you expect to make over time, given sales and outgoings)
• Sales Forecast (how much income do you expect to get from sales)

Make sure you include all your outgoings, even the most insignificant, so that you get a true profit projection. Don’t forget: premises (rent or mortgage payments), power (gas, electricity etc), telephone, insurance, postage, stationery, equipment machinery or tools, advertising, bank charges & interest, wages / salaries, vehicle expenses, accountancy fees, legal / professional fees, tax, depreciation.

Some items should be broken down further in the cash-flow plan, for example: bad debt provision, loan and financing repayments and VAT payments.

In addition to your spreadsheet, include a summary which details any capital you need, security you can offer lenders, a debt management plan, sources of revenue and any personal financial information you feel is relevant.