Business plan for a start-up ( Financial data) Literature review

Business plan for a start-up ( Financial data) - Literature review Example With god business plan, the future of the business is certain and all future occurrences will be met with certainty. For a stat-up business, plan is used by business to determine its future survival and viability. Businesses cannot run effectively without a plan. Most plan make assumptions about the future. Any assumption made should be made with great caution as failure for the assumption to hold, the whole plan might be jeopardized. A successful business plan should be prepared based on past experiences fact and empirical data. It requires lo of expertise to prepare a concrete plan for a start-up business that has no past records experience. This paper will focus on the financial side of a business plan by reviewing overall financial records for all industries that are components of a plan. The financial plan of a start-up business will be based on the size of the proposed business. This means that it will rely mainly on assumptions. Analysis will be done o the future cash flows, i ncomes and expenses, balance sheet, capital, profitability and financial ratio analysis. The major assumption that will be used in the plan will be: The prevailing market and economic conditions prevail. Methodology The plan will be prepared based on projection of financial statements. ... According to Lemieux (2013), The various parameters that have taken into consideration for evaluation of the net income of the firms are the general, selling and administrative expenses, depreciation, regulatory expense, insurance costs of the company, rental charges to be paid for the establishment of the business, cost of advertising, utility bills, etc (Lemieux, 2013, p.39). These expenses are adjusted to the gross earnings to form the net earnings of the company. The net earnings of the company are important for the calculation of the net operating cash flows. The net operating cash flow has been forecasted to be 35500 pounds which is expected to increase gradually in the next two years. There are investment cash flows for firms which would involve cash outflows for purchase of fixed assets of the company and other capital expenditures. The cash out flows on account of investment activity of the business is valued at 16250 pounds. The investment activities are expected to increas e in the first three years as the business would focus on increasing their market share. The cash outflows due to financing activities would be due to the interest payment for the debt incurred from the bank and the interest paid to the creditors. The cash outflow for financing activities of the business would be 15650 pounds that is anticipated to increase in the next two years. The net cash flows for the business have been forecasted to be 3600 pounds which is expected to increase by 10% in the next two years as shown in Table 4 in the Appendix. Uses of the data The profit and loss statement and the balance sheet have been forecasted as a part of the business plan and have been presented in Table 2 and Table 3 respectively in the