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Financial Plan


ASSESSMENT TASK 2: DESCRIPTION Students need work to build the vision and financials of this start-up business. The assignment consists of the development of the financial component of a financial plan for a ‘new start business’ that you establish. You can base this on a real, proposed start-up business, or you can use your imagination to design a hypothetical start-up business. We suggest you use an industry with which you are familiar so that you can include relevant information and sensible data. The report should include the following: • Executive summary (One page absolute maximum) – this is important as in many instances this is where you ‘sell’ your firm and the application for finance and this will determine whether or not the financiers will look at the rest of the document. • Contents page • Introduction and explanation of the business venture (short but sufficient to explain business) • Assumptions – these must be documented, clearly presented and must be realistic e.g. you cannot simply say I will achieve 10% market share. You need to justify how and why you will achieve this. This may require you researching various sources for information regarding the type of business, the market size as well as consumption patterns for the service your new firm will provide. • Conclusion • Budgets for two years on a monthly basis. The budgets should include, but not be limited to:  Sales budget (volume)  Sales revenue budget ($)  Debtors budget ($)  Expenses budget ($)  Capital budget ($) o Budgeted Statement of Financial Performance for two years (P&L). o Budgeted Statement of Financial Position for two years (Balance Sheet) o Budgeted Cash flows • Ratios analysing the business’s liquidity, solvency, profitability and efficiency. • Comment and analysis of ratios (this would obviously have to be a favourable commentary otherwise you would not enter this start-up opportunity! i.e. an opportunity to ’sell’ your business.