An important part of the business plan is the financial plan. In this plan you assess the financial viability of your company. Drafting this plan will give you an answer to many questions such as:
- How much money do I need to realise my ideas?
- What is the revenue I get in return?
- What are the costs and income I can expect?
- What is investments I need to do?
- Is the strategy I have envisaged financially feasible and will my company be profitable in the end?
This can show that you may have to adapt your original concept and that you need to make a number changes to your marketing plan.
The information that you get from the financial plan is very useful because this way you know as much as possible in advance. With a well-substantiated plan you also feel stronger when negotiating with potential partners or investors.
Remark: when starting a private limited liability company you need to deposit your financial plan at a notary. Your financial plan can be requested in case you go bankrupt within a period of three years after starting the business. If it turns out that insufficient starting capital was foreseen in the financial plan, you can personally be held liable as a partner.
Drafting a financial plan and assessing the viability of your company is done in different steps. You will probably need to go back a few steps and run through the whole process again when you see that changes need to be made. Keep working with realistic information for your financial plan. It is often tempting to continue to fine-tune the financial plan until it gives a positive result. This way of course you will no longer have an objective and complete image of your project.