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The economic and financial plan, what it is, and advice on how to structure it

The economic and financial plan, what it is, and advice on how to structure it

The financial and economic plan is essential to creating a well-structured business plan. Each startup in the business plan must indicate how it intends to operate economically. This forecast goes beyond a simple calculation of possible income and expenses.

Realizing a timely and credible economic and financial plan is vital to give professionalism to your business plan. Making your startup appear authoritative in front of the investors’ eyes.

In particular, the economic and financial plan focuses on the feasibility of your business project. All this by defining the investments for the startup of the activity. Developing a financing plan for the startup’s activities, and indicating the sources from which you intend to draw.

In addition, the business’s profitability in the future is indicated in the central part of the economic and financial plan. With the planning of revenues and costs expected in the first years of activity.

To make the data entered in this vital business plan section credible and realistic. You will need to enter a comment explaining the criteria adopted to derive the data entered.

Furthermore, over time, from 6 months to 6 months in the case of a startup. It is strongly recommended to update the forecast data based on new calculations and the evolution of the startup.

For example, suppose the number of employees has increased. Or the services/products launched on the market have changed. In that case, updating the expenditure and revenue forecasts is also necessary.

How to make an effective financial plan

The less experienced may be afraid in front of the company of having to draw up this part which is the heart of the Business Plan. However, in reality, without improvising, it is possible to start from a draft of a simple economical and financial plan. And then go into detail following the right advice.

The first step in creating financial projections for startups is developing a detailed report of your startup’s cash flows. Establishing how much money goes out and how much goes in is the first key step.

However, to get an overall idea of ​​the economic and financial framework regarding your startup, this is not enough.

There are many fundamental aspects to be addressed in the financial and economic plan, which will have to indicate an economic vision from 1 to 3 years (5 years in some specific cases).

This information covers general assumptions, sales forecasts, startup, and operating costs, salaries, contracts, and financing requirements.

Economic and financial plan: what advice to follow

As we said, the financial and economic plan highlights your new business’s economic side. For this reason, in preparing the document, we advise you to consider some fundamental aspects.

Here are our recommendations:

  • Be accurate in forecasting profits, losses, sales, and cash flows.
  • Enter budget forecasts, especially in the case of complex activities (always considering the sector in which your startup intends to operate).
  • Indicates the assumptions underlying the forecasts, harmonizing what is stated in this section with what is written in the rest of the business plan
  • Enter realistic forecasts, particularly if your new startup intends to establish itself in new markets.
  • Indicate what resources you can dedicate to selling, what kind of financial feedback you expect from customers, and how much time you think is needed for customer engagement.
  • Monitor general trends in historical and forecast numbers and see if they are credible. At the same time, consider the possibility of problems and delays.
  • Use “what-if” scenarios. For example, consider what you plan to do in the event of a drop in sales or other revenue issues.
  • Include detailed financial forecasts in a dedicated final appendix

For more information you should visit business plan consultants.

Economic and financial plan with Maven Business Plans experts

If after this full immersion you still have questions (which is very normal). Do not waste time and immediately clarify your doubts by asking an expert.

Asking for help is an act of professionalism that shows the desire to do well and opens up new paths thanks to the knowledge of experts on the subject.

By relying on an expert, you can quickly achieve great results. Consequently, you should devote yourself to the various other aspects of starting your business.

To draw up a convincing financial plan, which can get you the funds you need from investors, Maven Business Plans is always by your side.

Expert supervision. Like after writing a business plan for one of our new businesses. Whether you know a lot about economics and finances or just need the basics of a financial plan. Trust a team with experience to help you do well.

If you want to take advantage of the best service to draw up an investor-proof financial plan, you can follow Maven Business Plans.

Talk to experts and prepare an authoritative and effective economic and financial plan for your business plan. Create a solid foundation for your success!

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