Family finance

Creating a Business Plan (Part 2 of 2)

After writing a business summary, the basics, and making plans about revenue, capitalization, marketing and human resources, here are the remaining parts of a good business plan.

Financial Plan

  • Start-up budget: List where and how you will secure capital to accomplish this start-up and its desired growth.
  • Project a 5-year Balance Sheet (Assets and Liabilities).
  • Project a 5-year Profit and Loss Statement (Income and Expense).
    • Income projections
    • Cost of materials/supplies = cost of goods sold
    • Sales overhead
    • General and administrative costs = overhead
    • Projected margin = profit margin
  • How will you manage company earnings?
    • Percentage to retained earnings
    • Percentage to profit sharing
    • Percentage to charitable contributions<
    • Percentage to stockholder dividends
  • Summarize the Financial Plan.
    • Projected cost of sales
    • Projected operations overhead
    • Projected general and administrative overhead
    • Projected margins

Personal Business Principles and Policies

  • List your personal long-term goals for the business: What do you want to accomplish?
  • Explain why you have chosen business over employment.
  • List your goals in the following areas:
    • Describe how you see business and your personal values interacting.
    • Use of money.
    • Use of time.
    • Ethical issues.
      • Paying taxes.
      • Policy making.
      • Use of company property.
      • Confession and restitution.
      • Business standards.
      • Personal standards: What are the standards you would want others to hold you to?
      • How will business affect the interconnection of your faith, family, employees, customers, and mentors?
      • Things to avoid—things you should not do.
      • Things you want to accomplish: What is important?
  • Employee practices
    • Hiring
    • Motivation
    • Dismissal
    • Steps to dismissal
    • Aborting dismissal
  • Management selection
    • Criteria for managers
  • Debt-management principles
    • Short-term debt
    • Long-term debt
    • Debt guidelines: List things you would borrow for and things you would not.
  • Credit Principles
    • Develop your business credit terms.
    • How will you handle overdue and collection accounts
  • Establish your policy for suing and being sued

Part 1 available from www.challengenews.org.

Courtesy Crown Financial Ministries www.crown.org.nz

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