The existence of a Financial Plan is indispensable for your Startup. This plan is worth for you to document all the procedures and actions involving money. Every single penny that the company spends MUST be accounted in the financial plan in order to have control. By keeping this plan updated and seriously, you will create a good picture of how much money you are spending in each period and where you might be able to save in a future scenario. The Financial Plan is also a very important tool when it comes to make an investment decision. It will help you to understand whether the investment is feasible or not and whether it should provide better results in the future.
The Financial Plan should be simple and objective. There is no need for a complex plan which no one in the Startup will understand.
The main components of a Financial Plan which should be included in yours are:
1. Income Statement
2. Balance Sheet
3. Cash Flow Statement
In the following articles we will briefly explain how to create and use each of these components.
The Business Zoom Hint: According to our personal experience, we suggest you to start thinking about the financial plan as soon as possible. If you read the next articles, you will probably understand that there are very easy and simple ways to develop such a plan which will give you a lot of benefits!
Exercise: There will no exercise regarding this topic, it is up to each Startup how and when it is the right time to create study their financial position and develop a financial plan.