This section focuses on the feasibility of the proposed business, product, and/or service. This is where you present current and/or projected financial statements. This section should present readers with complete financial statements (balance sheet, income statement, cash flow, changes in equity/retained earnings). These statements could be based on a worst-case, average, or best-case scenario. Regardless which scenario is used, the statements should be reasonable and grounded on solid market research and analysis.
This section is of utmost importance. Remember who your audience is i.e. Who is reading your business plan (investors, venture capitalists, etc.). This section should also include a breakeven analysis to indicate the point at which you are expected to “break even” i.e. Total revenues and total costs are equal.
This section should cover the following points:
- Projected sales
- Projected start-up expenses
- Capital requirements and investment/financing
- Projected financial statements (if possible around five years)
- Balance sheet
- Income statement
- Statement of cash flow
- Statement of changes in equity/retained earnings
- Break Even analysis and performance metrics
Place complete results, such as extensive tables, in an appendix, particularly if the volume of this information interrupts the flow of the text.