Tip 1: Do Your Homework
Startups often overestimate sales potential and underestimate costs, Irons says. Consider factors like expenses, increasing prices and additional services. “If sales are going to increase, make sure there are supporting strategies and numbers behind [that] growth in your business plan,” Irons says. “Don’t just assign an arbitrary percentage because you hope to grow that much.”
Tip 2: Include a Cash-Flow Statement
“Your cash-flow statement shows your ability to cover all expenses, repay any debt and collect payment from customers,” Irons says. It also shows investors the cash you have on-hand to continue running the business.
Tip 3: Use Historical Statements
Your historical financial statement shows your business’s overall performance; it should be used as a tool for decision-making and projecting future performance, Irons says. Use your past success to support how you’ve arrived at your projected financial conclusion.
Tip 4: Turn Your Business Plan into a Living Document
Your business plan should be ever-changing. “Use the plan, learn from it and then adapt when and where needed,” Irons says. Communicate your findings with employees, key business partners, investors and lenders.