By considering factors like production costs, market prices, and demand for your services, you can achieve a clear understanding of your financial situation and discover your full profit potential. Ensure you are creating your ideal business strategy by making careful and flexible financial predictions. Contact FOSS to speak with one of our experts about your small business plan. Skip to content. Client Resources Client Login top-bar. Facebook page opens in new window Twitter page opens in new window Linkedin page opens in new window YouTube page opens in new window.
Business Planning for Nonprofits
Importance of Financial Statements | Top 10 Reasons
A business plan is all conceptual until you start filling in the numbers and terms. The sections about your marketing plan and strategy are interesting to read, but they don't mean a thing if you can't justify your business with good figures on the bottom line. You do this in a distinct section of your business plan for financial forecasts and statements. The financial section of a business plan is one of the most essential components of the plan, as you will need it if you have any hope of winning over investors or obtaining a bank loan. Even if you don't need financing, you should compile a financial forecast in order to simply be successful in steering your business.
Purpose of Income Statement
Banks, investors, employees and anyone else interested in a company can review these reports and see how much money is coming into and going out of the business, the types of expenses the business has, and whether or not the business is profitable. Balance sheets and income statements can also help you track the success of your business and spot potential problems. An asset is anything that has value, such as equipment, real estate or cash in your bank account. Liabilities are money you owe others, such as a mortgage on property and the balance of loans and debts to suppliers. Accrued taxes and payroll that you owe are also liabilities.
In this edited excerpt, the authors outline what type of information you should include in the financials section of your business plan. Astute investors look carefully at the charts, tables, formulas and spreadsheets in the financial section because they know this information is like the pulse, respiration rate and blood pressure in a human being—it shows the condition of the patient. Financial statements come in threes: income statement, balance sheet, and cash flow statement.