Updated: 17 May 2015 06:41. By, Melkisedeck Shine.

Completing a thorough financial analysis of your business will help you determine whether or not this business is viable. Can you make enough money in this business for your personal needs, to run the business and make a profit? Knowing your monthly sales and expenses helps you make good decisions such as when to purchase equipment, hire staff or use your line of credit.

There are six key elements to consider in the financial plan:

1) First, compile a list of all your start-up costs. Include all the money you will spend getting the business set-up for opening day.

2) Your cash flow projections are shown on a chart that outlines the revenue you expect to earn each month and the money you must spend each month (expenses). This lets you know if you can pay your bills each month. You must be prepared to justify your sales projections and expenses.

3) A projected income/profit and loss (P/L) statement shows the projected profit/loss for your business for a given year and shows the “health” of the business. It is an estimate of all sales revenues, direct, indirect and administrative expenses (including depreciation, interest expenses and taxes payable) and subsequent profit or losses for the first five years.

4) Your opening balance sheet statement is a “snapshot” of what the business owes and owns at a particular moment in time. It consists of a projected statement of assets, liabilities, and equity for the first five years. Assets include cash, inventory, accounts receivable, buildings and equipment. Liabilities include short-term debt, accounts payable, taxes payable, and long term debt.

5) If you require money to start your business, detail your financing requirements: the amount of money required, what the money is for, and your repayment plan. Owner’s Equity or Shareholders Capital is the total investment by the owners or shareholder’s of the business.

6) Risk analysis can be shown using scenarios based on best/worst case occurrences. Often, three different cash flow statements are included in a plan. You can do an optimistic, pessimistic, and realistic cash flow to show how your company would adjust to different market scenarios. Be sure to include information, or assumptions, you made for each scenario.

Read more on;

a.gif Business Market Research

• How will people behave regarding a particular topic, habit, activity, decision or business?
• Will my idea work? Can I sell my product or service to make money
• What marketing tools will be most effective?
• How much product or service can I sell?
• Is there a need for more new products or services?.. read more

a.gif Business Plan Layout

Business plan should consist of the following;.. read more

a.gif BUSINESS FINANCIAL MANAGEMENT PLAN

Sound financial management is one of the best ways for your business to remain profitable and solvent. How well you manage the finances of your business is the cornerstone of every successful business venture. Each year thousands of potentially successful businesses fail because of poor financial management. As a business owner, you will need to identify and implement policies that will lead to and ensure that you will meet your financial obligations… read more

a.gif BUSINESS MANAGEMENT PLAN

Managing a business requires more than just the desire to be your own boss. It demands dedication, persistence, the ability to make decisions and the ability to manage both employees and finances. Your management plan, along with your marketing and financial management plans, sets the foundation for and facilitates the success of your business… read more

a.gif Business Market Research

• How will people behave regarding a particular topic, habit, activity, decision or business?
• Will my idea work? Can I sell my product or service to make money
• What marketing tools will be most effective?
• How much product or service can I sell?
• Is there a need for more new products or services?.. read more

a.gif Business Plan Layout

Business plan should consist of the following;.. read more

a.gif BUSINESS FINANCIAL MANAGEMENT PLAN

Sound financial management is one of the best ways for your business to remain profitable and solvent. How well you manage the finances of your business is the cornerstone of every successful business venture. Each year thousands of potentially successful businesses fail because of poor financial management. As a business owner, you will need to identify and implement policies that will lead to and ensure that you will meet your financial obligations… read more

a.gif BUSINESS MANAGEMENT PLAN

Managing a business requires more than just the desire to be your own boss. It demands dedication, persistence, the ability to make decisions and the ability to manage both employees and finances. Your management plan, along with your marketing and financial management plans, sets the foundation for and facilitates the success of your business… read more

a.gif Facts about midnight prayer

Facts about MIDNIGHT prayer:.. read more

a.gif Difference of men and women at their age

Women are fickle minded.At 18, they want handsome men.At 25, they want matured men.At 30, they want successful men.At 40, they want established men.At 50 ,they want faithful men… read more

a.gif Forms of Business Structure

There are several legal forms to choose from when selecting the best means of structuring your business. Carefully considering the various options before start may save time and money later. There are several forms of business structures including:.. read more

a.gif Avoid a bad Marriage

AVOIDING A BAD MARRIAGE.
By Pastor Chris Oyakhilome PhD… read more

a.gif MARKETING STRATEGIES FOR YOUR BUSINESS

Marketing is a complex subject but one of the most important contributing factors to the success of your business. Without customers there are no sales and therefore no profits… read more

a.gif Be aware of this trick

A lady's handbag contained her cell phone, ATM card etc was stolen.
_Thirty minutes later she managed to call her husband from her friend's telephone, telling him what happened._.. read more

a.gif How to develop ones Enterprising Tendencies?

At some point in an entrepreneurial career a person has to start developing experience and learning actively about what they do best and what they should learn to do better, and the sooner they start learning actively the sooner they start being enterprising… read more

a.gif 18 Best techniques steps for approach a girl

  1. Understand women.
  2. Tune up your social skills.
  3. Be confident.
  4. Don't worry about what people will think of you.
  5. Know that you're taking a chance, but it's not a big one.
  6. Keep the benefits in mind… read more

Other interesting posts;-🙉