Chapter 5: Financial Plan

CHAPTER 5: FINANCIAL PLAN

5.1 INTRODUCTION

Sound financial management is one of the best ways for the business venture to remain
profitable and solvent. In this section think through some of the general issues you will have
to address in your formal business plan.

To effectively manage your venture finances, plan a sound, realistic budget by determining
the actual amount of money needed to start your venture (start-up costs) and the amount
needed to keep it open (working capital or operating costs).

5.1 Start-up Cost

Estimate the costs incurred in conjunction with one-time activities that the venture
undertakes when it opens a new facility, introduces a new product or service,
conducts business in a new territory or with a new class of customer or beneficiary,
initiates a new process in an existing facility or commences some new operation after
considerable research and discussion.