The economic-financial plan stands out as the section with the greatest scope and scope of the business plan that every company must develop. This is because it is a document that has the necessary data that makes it known whether a company will be profitable or not and, if so, when it will be able to start generating profits.
It is a tool through which you can have a quantified and realistic vision of the business idea and is the best way to present the business project to potential investors.
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What is a financial plan?
The financial plan is a document that is framed within the global business plan of a company and that collects all the information quantified and developed, calculated in euros, for each of the action plans that correspond to each area of the company.
This instrument is rated as the best tool to analyze both the financial and economic viability of a new business project considering different temporal perspectives (short, medium and long term).
If you do not know what the financial plan is for , you should know that it is not only very useful for companies that are beginning to take their first steps, but also for companies that want to consolidate and improve their results.
All in all, the economic and financial plan allows the entrepreneur to estimate whether his project is capable of meeting the expected expectations, especially those generated in relation to expected liquidity and profitability. And knowing this relevant information, decisions can be made in a more accurate way so that the company can take its first steps, consolidate, maintain and grow at a sustainable and constant rate.
Now that you know the importance of this plan, if you want to know how to develop an economic-financial plan for a business, pay attention to the following lines.
How to prepare an economic-financial plan step by step?
To start preparing the financial plan of a business plan, you must know the point where the company is and where it wants to go. Self-knowledge is the main is the main engine of success.
If you want to develop the financial plan of a company effectively, it is convenient to follow these six steps:
- Analyze the current reality of the companyand the direction it wants to take to reach a specific point. That is, the financial statements must be determined and projected. In this step, it is essential that the expected profits are defined in the future, as well as the financial reasons, including leverage, liquidity and profitability.
- Determine the necessary fundsbased on the capital that the company needs to consolidate over a period of five years.
- Forecast the availability of capitalfor a given period of time, knowing and analyzing all possible options and detailing the possible sources of financing for the project.
- Carry out a systematic controlto establish the resources in an adequate way and, at the same time, check that they are used correctly.
- Bear in mind that the project is exposed to multiple external factorsthat may deviate the financial course initially marked, so that as many solutions as expected and planned assumptions must be presented.
- Set up aperformance-based compensation system . The most convenient thing would be to create a system that encourages and encourages the competitiveness and productivity of those involved in the organization to achieve the objectives more than enough.
With this information you will be able to prepare the financial plan of a business without problems . Use all the information that we have published about the financial plan and following these six steps you will get a document that will be of great help to you. You can also consult a model financial plan to adapt it to your needs.