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Resources for Developing a Financial Plan/A Financial Plan

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Unit 6.1-Resources for Developing a Financial Plan 

Introduction | A Financial Plan | Presentation and Customization | Risk Assessment and Management | How Do I Qualify? | Summary | Resources | Activities | Assessment

A Financial Plan

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A financial plan consists of sections that will enlighten the reader about the organization. Each section serves a specific purpose to accomplish this task. Many of the sections are not directly related to financial data. The plan should give the philosophy of the company, the way it is structured, its desired goals/ achievements, and the plans to get there. The major sections that follow provide a basic outline for a financial plan:

Cover page and table of contents

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The cover page, like the whole document, should be of professional quality. It identifies the preparer and lists the contents. The table of contents allows the reader to skip quickly to the information that is critical to his or her needs. It also provides an introduction to what the organization thinks is important for the reader to know about the business.

Mission statement

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The mission statement is often overlooked or given little consideration; yet it sets the stage for the entire plan and should be considered one of the most important parts of the plan. The opening statement describes the objectives and philosophy of the company.

Executive overview

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The executive overview provides the opportunity to describe senior management and their qualifications. The decisions of this group will determine the outcome of the plan. It is important that this section to cover the experience, education, background and successes of senior management.

Executive summary

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This statement justifies the reason for the preparation of the plan and assists a reader in quickly determining whether to proceed. The writing of this section must be consistent with the objectives of the company. Caution should be taken in the preparation of this statement to know the specific needs of a reader who is examining it.

Organization chart

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The organization chart is a visual presentation that provides a look at the size of the organization, its efficiency and potential succession. Succession is critical for providing continuity within an organization since most objectives are met over the long term.

Product and market overview

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Here the way the business operates is detailed. This presentation also demonstrates where the company fits in relationship to other competing businesses.

Market analysis and potential

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The potential market and ways to capture additional market share are critical to meeting all objectives of the company. This section identifies the size of the market, the market share expected, distribution methods, pricing, customer support, promotion and anything else that lends credibility to the projections.

Funding rationale

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Here the case for funding is made.

Financial statements

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The financial statements are often considered to be fixed in nature but can be presented in many ways. Financial statements should tell a story clearly and highlight the company’s strengths. Doing such requires both art and skill, which take time to develop. Always consider the reader foremost since the document is an appeal for that reader to become financially involved with the company.

Source materials

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Include all the research materials that support the financial plan.

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