Whether you are expanding your business or starting a new business, writing a business plan is very important. Business plan contains all the relevant information about your business venture, in which financial projection is one of the most important sections.
Financial projection includes financial statements such as income statements, balance sheets, and cash flow statements and it is necessary that financial statements must follow Generally Accepted Accounting Standards (GAAP). By the business plan reader, financial projection section will be greatly analyzed.
Here are some tips for crafting solid financial projections:
Get easy with worksheets: For all financial projections, worksheet software is the starting point. There are number of special software packages available that help you with financial projection in which Microsoft Excel is the most common. These worksheets or spreadsheets offer elasticity and allow you to adjust assumptions as per your desire. These spreadsheets software are helpful in many ways but on the other hand, they do not write the description part of the plan for you, so you will not get satisfactory result by using computer program in developing your business plan. ... read more