Business plan is a document that shows the planned performance of the company for 3 – 5 years: sales, profit, profitability, long-term goals, as well as what resources are needed to implement the project: staff, facilities, equipment, money, etc.

A business plan is created for a new project. For an existing project/enterprise, the business plan will be called the enterprise budget.

A business plan consists of various sections: company description, product description, staffing requirements calculation, market analysis, but the most important part of a business plan is a financial plan, which makes financial calculations for the project.

Very often, it is enough to provide an investor with a financial plan to make a decision on cooperation.

The financial plan is the heart of the business plan, which sums up the entire project through calculations.

Now we will look at a simple example of how to make a financial plan and calculate the payback period of a project. We will need this information to assess the attractiveness of the project and the feasibility of buying the business…

The financial plan has the following structure

• Revenue – this is the income from sales, the money you received from the sale of the product
• Cost of purchase – the cost of purchasing goods, raw materials, semi-finished products
• Marginal profit – the difference between item 1 and item 2.
• Operating expenses – all other expenses of the enterprise: rent, wages to employees, security, cleaning, advertising costs, etc.
• Operating profit is the difference between item 3 and item 4.

Note!!!! what the difference is between sales income (revenue) and company profits.

Sales revenue is all the money we got from selling a product or service, and profit is the difference between sales revenue and expenses incurred.