The Entrepreneurial Financial Plan

 Financial Roadmap: It provides a clear financial roadmap, outlining how the business
will generate revenue, manage expenses, and achieve profitability.

 Investor Confidence: It instills confidence in potential investors by demonstrating a

well-thought-out strategy for financial sustainability.

 Resource Allocation: Helps in efficient allocation of resources, ensuring that funds are
utilized wisely and in alignment with business goals.

 Risk Management: Identifies financial risks and challenges in advance, allowing for
proactive risk mitigation strategies.

 Budgeting: Facilitates budgeting and cost control, preventing overspending and financial
strain.

 Cash Flow Management: Ensures adequate cash flow to cover operational expenses,
preventing cash flow crises.

 Decision Making: Guides informed decision-making by providing financial data and

performance metrics.

 Goal Achievement: Helps in tracking progress toward financial goals and adjusting
strategies as needed.

 Sustainability: Ensures the venture's long-term sustainability by managing cash reserves

and planning for growth.

 Compliance: Ensures compliance with financial regulations and tax obligations,

avoiding legal issues.
The Entrepreneurial Financial Plan
It provides Entrepreneur with a complete picture of;
 The Amount of funds that are coming into the organization.
 Where funds are going and how much cash is available.
 The Projected financial position of the firm.
The Plan explains how the entrepreneur intends to meet financial obligations and maintain the
venture’s liquidity.

Operating and Capital Budgets

 There are developed before developing the pro forma income statement.
 Sales budget: An estimate of the expected volume of sales by month.
 Cost of sales can be determined from sales forecasts.
Operating Costs: / Projected Operating Expenses
 Includes fixed expenses incurred regardless of sales volume.
 Variable expenses must be linked to strategy in the business plan.
Proforma Income Statements
Projected net profit calculated from projected revenue minus projected costs and expenses.
Points to consider: for projection and implementation accuracy.
 Increasing selling expenses as sales increase should be taken into account.
 Projections should be made for 1, 2 and 3rd year.
Performa Cash Flow:
Projected cash available calculated rom projected cash accumulations minus projected cash
disbursements (Based on Best Estimations).