The financial part of the business plan


Table of Contents

Financial part of business plan. 3

Don't use plagiarized sources. Get Your Custom Essay on
The financial part of the business plan
Just from $13/Page
Order Essay

Introduction. 3

Description of business. 3

Description of product/service. 4

Marketing plan. 4

Industry. 5

Target market (customers) 6

Competition. 6

Advertising and promotion. 6



Introduction. 7

Objectives of Financial Planning. 8

Importance of Financial Planning. 8

Business Plan Financial Projections. 9

Income Statements. 9

Balance Sheets. 10

Cash Flow Statements. 12

Break even analysis. 12

Sales forecasts. 13

References. 14





Financial part of business plan



The beverage industry is fast expanding with a variety of products and services on offer. More and more people want to have a taste of new beverages packed in an enticing way, or served in a unique way. Tea and coffee have a rich history from when they are planted in the farms to when they reach our hands. Many people are opting for these beverages, and this business plan follows the unique packaging and serving methods; that was highlighted by recent market research. There is a hungry market for the products and services Quench Beverages will offer.

Business plan outline

Description of business

The proposed name of the business is Quench Beverages. The name is derived from the needs of the expected customers who will get what they want from today’s beverages. The business started as a sole proprietorship, and the owner is Mr. Washington Churchill from Nevada. He has an MBA from Harvard University, and a diploma in Beverage Science from Minnesota Institute of Food Sciences.  He has an initial capital of $900,000 to invest in the business. He started out as a small outfit in the outcasts of New York in 2008. The small venture will grow to over ten outlets within two years of inception while serving the wider New York City.  Mr. Washington then joined hands with Mapleton Industries in 2010 with the partnership name Quench Beverages.  They increased the range of products and services. Since then there have been increased turnover, and annual profits to the tune of 13%. Today Quench Beverages employs 200 permanent employees, and is continuing to become innovative and grow (Gordon,1989;  Metayer, 1999).

Description of product/service

Quench Beverages specializes in beverages and drinks derived from coffee and tea. They offer a wide variety of products that are either served at their outlets or distributed through automated vendor machines (Pinson, 2004; Eric.& Bornstein, 1993; Bent, et al, 2002),”


They have cappuccinos, different flavors and shades of co coffee and tea, iced tea, and the list is endless. Their products have been approved by America Health and Safety Society, and n value added for health concerns of the customers. Their products have anti-aging additives and disease repellant capabilities. They are served in panoramic environments         where clients take full advantage of relaxing during the day or night. The vending machines are installed in safe places, and the packaging is the best in the world. When customers buy the products or services, they get a value for their money. The prices are just made for the target market that will be glad to spend their money on the business (Porter, 1998).

The business hopes to offer services in a way that have never been tried before. The varied health solutions the products offers are found nowhere in the beverages industry. The outlets are constructed in a unique way and will offer customers a satisfying experience.

Marketing plan

The beverages industry is growing in leaps and mountains with customers getting a new product or service every quarter. The number of players is multiplying every day. It offers a rich area to invest in, as it has not been fully exploited

Quench Beverages is targeting the high end segment of the beverages market. It needs to satisfy the needs of the society, who are able to be comfortable with the prices of products and services. These populations live in suburbs and affluent regions of the city. They need quality products and services, and this is the gap that Quench Beverages saw and will exploit. Quench Beverages wish to open more branches in other states of the nation.

There are numerous players in the market, but they tend to offer their products and services in a traditional manner. Customers will most likely predict what to expect from one player to another, as they offer monotony across the board. Quench Beverages will concentrate on their outlets and make them the best in the world, so that their customers will have an unforgettable experience. It is made in such a way that it provides the office environment away from the office, and a home environment away from home. Promotion will be in terms of TV, internet, bonuses, free treats, and leisure magazines. The vendor machines have voice capacities, installed in safe areas, and remarkably straightforward and easy to use.



Quench Beverages is in the hospitality industry. This is one area of business that will keep on growing for a long time to come. The industry is not yet fully exploited, and there are many faces that have not yet been shown to the spending public. Businesses enter the industry through either franchises or just small start up and growing.

Target market (customers)

This section highlights the potential customer to the business. For example, the beverage company can have a section on the target market as bellow.

The beverage is suitable for people of all ages, gender, and socioeconomic backgrounds; however, the company expects a large acceptance amongst the youth. The beverage market has never had a drink that can be taken in all occasion. The main ones are alcoholic drinks and energy drinks. The customers for the drinks are any thirsty person irrespective of class or genders innovative feature include fashionable design, reusable packaging and competitive prices.


Potential customer can get their drinks from mall, restaurants and hotels; however, the company plans to pace its one stop shop strategically at each corners, social pace, and significant market places, including mall and supermarkets through franchise deals.  The competitors have a large capital base and an extensive distribution network; however, they do not have the market intelligence and proper strategies to market their products. The company plans to leverage its unique position and market intelligence to realize its full potentials.

Advertising and promotion

The company will make use of the following strategies to market its products: Trade shows, , internet, periodicals, coop advertising, marketing representatives,  social media and finally viral marketing.   The company will gauge the success of the promotion efforts by analyzing the growth in market share and sales volume.


The management of the business has the most outstanding qualities in the market, from effective core competencies and skills to technical skill. Their strong business acumen is an understatement. The management is made up of accountant, a banker, and three marketers. This team will steer the company to success

Financial plan


According to Bent, &Søren, (2005), financial part of a business plan must contain some supremely powerful information. This section must clearly indicate a company’s past financial report, present financial position as well as the company has projected financial position. The basis of the future financial projection about the desired financial position is sound assumptions. This par must also define the sources of the finances, capital, the amount required for start up. Additional investment for support and expansion. How the management will use the finds and the past financial statement (Grier & Nagalingam, 2000; Khan, 1993; Fleisher &Bensoussan 2003).

Sales forecast, balance sheet, Income statement, cash flow, Break-even analysis and financing requirements

All business managers require proper information to make intelligent and well informed financial decisions. On the other hand, all investors will desire to look at the financial statement to make wide investment decisions, b y analyzing the potentials of their investment and the ability of the investment to payoff. Additionally, corporate partners would need to have a proper financial information to ascertain the amount of risk involve negotiating a contract with customers and suppliers. Therefore, Companies must estimate the amount of capital they require and determine the level of competition the company is operating at. The financial states are used within the company to govern procurement, administration of money as well as investments (Burkhart & Reuss 1993; Bradford & Duncan, 2000).


Objectives of Financial Planning

The business must conduct financial planning to:

Determine the capital requirement: this requires the analysis of the company’s costs of current and fixed assets and long term planning. Any capital requirement must have both long-term and short terms rage analysis (Michael &Kaye, 2005).

Determining capital structure- the company must plan its finances to according to the capital structure such as the company’s equity- debt ratio in both long-term and short term, and hybrid securities. It determined the kind and proportions of the capital that the business requires.

Framing financial policies the commonly will requires to have financial policies are regulation that govern activities such as cash control, lending, and borrowings. These regulations have an Impact on the company’s financial planning and execution. In this way, the company can ensure that it optimizes its resources and minimizes its cost of operations, thereby remaining profitable at all times (Levine, &Boldrin , 2008; Dayananda , Harrison & Herbohn, 2002)


Importance of Financial Planning

  1. A company must plan its finances to ensure that there  are a reasonable balance revenue and expenses in order to maintain stability.
  2. This also helps in ensuring that the financiers early appraise the company capital requirements
  3. The company can also make growth and expansion plans depending on the result that the finance manager posts. The company can only remain stable maintain its profitability through proper financial planning
  4. A company can reduce uncertainties related associated to changing market trends and macroeconomic dynamics by planning. In this way, uncertainties will no longer hinder growth

Business Plan Financial Projections

Financial projection is the only tool of measurement of the true worth of the business, because it shows the viability and the profitability of the business. Financial projections include records and statement such as income statements, balance sheets, and cash flow statements.  If properly prepared, they can convince financiers that the business will generate a stream of cash flows to repay back their investment and fuel the desire to succeed. For example, consider the case of Nextel communication, which is a startup Company in Canada. Their income statement will looks like the one posted below (Haines 2004; Lusch & Lusch, 1987; and Brian , 2000).

Income Statements

According to Kono, (1994), the income statement or the profit and loss statement of business is a statement that shows the company’s revenue, expenses and net loss or net income over as fiscal year. The company will only realize net revenue if the total revenue is more than the total expenses and net loss, if the net total expenses is more than the total revenue. The company may decide to accumulate its net revenue and convert it to capital, thus it becomes owners equity, or ploughed back capital. Net loss has a negative impact on the owner’s equity

Nextel communication

Income statement


Year 1 Year 2 Year 3 Year 4 Year 5
Revenues $1,976,000 $2,074,800 $2,178,540 $2,287,487 $2,401,840
Cost of Sales 1,213,659 1,274,342 1,338,059 1,404,992 1,475,210
Gross Profit $762,361 $800,458 $840,481 $882,509 $926,630
Accounting 6,000 6,300 6,615 6,946 7,293
Advertising & Promotion 15,000 12,360 12,731 13,183 13,506
Bank Charges 41,466 43,571 45,749 48,037 50,439
Compensation & Benefits 246,643 254,042 261,663 269,513 277,598
Consulting Fees 2,400 0 0 0 0
Insurance 1,000 1,050 1,103 1,178 1,216
Lease – Facilities 336,000 337,000 336,600 336,000 336,000
Legal & Professional 500 500 500 500 500
Licenses & Fees 500 510 560 531 541
Maintenance 600 612 627 637 649
Miscellaneous 1,800 1,836 1,883 1,610 1,948
Office supplies 2,700 2,754 2,809 2,465 2,923
Security 720 742 764 727 810
Telephone 1,800 1,836 1,863 1,910 1,948
Utilities 4,200 4,410 4,631 4,842 5,105
Website 1,800 1,800 1,500 1,830 1,800
  Total Operating Exp. 663,159 668,323 679,265 690,569 702,276
EBIDTA $99,182 $132,135 $161,266 $191,336 $224,354
Depreciation 4,916 4,916 4,986 4,916 4,916
Operating Profit $94,266 $127,219 $156,310 $187,030 $219,438
Interest Expense 43,199 40,274 37,039 33,544 29,639
Earnings Before Taxes 51,067 86,945 119,241 153,486 189,799
Income Taxes 17,873 30,431 41,728 53,784 66,429
Net Income $33,194 $56,514 $77,543 $95,772 $123,370


Balance Sheets

Lorenzen, (2006), states that the company must always have a statement that shows its financial position after a certain period. The underlying formula in a balance sheet is total assets = total liabilities + owners’ equity. The financial position of a business includes, the amount of assets, that the company has, the liabilities or financial obligation that the company has and the capital as at any given time in the course of business operations. The business capital is the total amount of resources owned by the company such as assets and then liabilities that the company owes to other parties as at a specific date. On the other hand, Fahey & Narayman (1986), argue that residual interest that the company has is reinvested in the business. Therefore, the company must prepare a balance sheet to show its financial health, as at specific date The accumulated profit from the operation of is the owner’s equity. It is also the amount that the owner can lay claim on after the discharging the company’s debt obligations (liabilities). The company must show the owners equity whether they are from the owner’s investment in the business in terms of assets, cash (paid in capital), or they are from the ploughed back capital or retained earnings. The company might decide to retain its earning and use it as part of businesses use balance sheets for the following reasons.

1)         Form reporting reasons as a requirement of the limited company’s annuals reports

2)         To health the business owners and other interested partied asses the value of the whole business as at a given time

3)         As a tool for analyzing and improving the financial position and management of the business

Begin Year 1 Year 2 Year 3 Year 4 Year 5
Cash $33,150 $110,697 $210,697 $243,259 $293,834 $363,370
Inventory 425,000 425,000 424,781 446,020 468,321 491,737
Prepaid Leases 28,000 28,000 28,000 28,000 28,000 28,000
  Total Current Assets $486,150 $563,697 $663,478 $717,279 $790,155 $883,107
Fixed Assets 33,850 33,850 33,850 33,850 33,850 33,850
Less:  Depreciation 0 4,916 9,832 14,747 19,664 24,579
Net Fixed Assets 33,850 28,934 24,018 19,103 14,186 9,271
Total Assets $520,000 $592,631 $687,496 $736,382 $804,341 $892,378
Accounts Payable 0 68,908 139,654 146,637 153,968 161,667
Long Term Debt 468,000 438,529 406,133 370,522 331,377 288,346
Total Liabilities 468,000 507,437 545,787 517,159 485,345 450,013
Owner’s Equity
  Paid-in Capital 52,000 52,000 52,000 52,000 52,000 52,000
  Retained Earnings 0 33,194 89,709 167,223 266,996 390,365
Total Liabilities & Equity $520,000 $592,631 $687,496 $736,382 $804,341 $892,378

Cash Flow Statements

This statement analyses the changes for cash and any other cash equivalent over a trading period. This includes cash on hand and the demand deposits that accrue to a company. It also includes short term and liquid investment that the company can readily convert to cash. These cash equivalents are always subject to an insignificant risk of changes in their value. Companies must develop a cash flow statement to help them in predicting their future cash flows. Kit is also useful for analysis and financial decision making.


Year 1 Year 2 Year 3 Year 4 Year 5
Operating Profit:: $94,209 $127,719 $156,310 $187,050 $219,738
Add:  Depreciation: 4,586 4,806 4,916 4,956 7,916
99,482 132,15 161,826 191,946 224,354
Working Capital Investment: (68,908) (70,943) 14,286 14,968 15,779
Cash From Operations: 168,390 203,101 146,900 176,968 208,935
Interest Expense 43,699 40344 37,029 33,529 29,609
Income Taxes 17,873 30,431 41,598 53,724 66,329
Net Cash Before Debt Pmt 137,018 132,396 68,178 89,760 112,567
Debt Payment 29,561 34,696 39,611 38,195 43,031
Change in Cash $77,557 $100,000 $32,462 $60,575 $69,836
Cash Reconciliation
Beginning Cash $33,150 $110,697 $210,697 $293,259 $297834
Change in Cash 77,547 100,000 32,562 500575 69,586
Ending Cash $110,697 $210,697 $243,259 $293,834 $363,370


Break even analysis

Break even analysis if the a method used by companies to determine the point at which they start making profits, or the volume of production at which the company is not making loses or profit. This point is called breakeven point. A company may vary the production volume to the right of the breakeven point to realize profit or to the left to start making losses

Sales forecasts

The sales forecast is the achievable sales volume that the company predicts within a given period.  Most companies have sales forecast for the whole, year, however, the most effective sales forecast is the quarterly sales forecasts as it allow for time evaluation of the performance. It also allows for cross sect oral comparison and implementation of the intervention measures before the company start making loses. Below is a sample graph of the sales forecast of Nextel communications.


Pinson, L., (2004). Anatomy of a Business Plan: A Step-by-Step Guide to Building a Business        and Securing Your Company’s Future (6th Edition). Page 20. Dearborn Trade: Chicago,          USA

Brian R. & M. Bornstein (1993), ‘The Ernst & Young Business Plan Guide’ (New York:     John     Wiley and Sons)

Bent F, Matte K. Skamris H. &Søren, (2002),”Underestimating Costs in     Public Works   Projects: Error or Lie?” Journal of the American Planning Association,          vol. 68, no. 3, 279-295

Bent F. &Søren B., (2005), “How (In) accurate are Demand Forecasts in Public    Works Projects?” Journal of the American Planning Associations vol.71, no. 2, 131-146

Burkhart L., & S. Reuss., (1993): Successful Strategic Planning: A Guide for Nonprofit      Agencies and Organizations. Newbury Park: Sage Publications.

Bradford & Duncan (2000). Simplified Strategic Planning Chandler House.

Haines G. (2004). ABCs of strategic management: an executive briefing and plan-to-plan day on strategic management in the 21st century. NY Sage

Kono, T. (1994) “Changing a Company’s Strategy and Culture“, Long Range Planning, 27, 5        , pp: 85-97

  1. Lorenzen, (2006). “Strategic Planning for Academic Library Instructional Programming.” In: Illinois Libraries 86, no. 2 (Summer 2006): 22-29.

Fahey and V. Narayman., (1986). Macro environmental Analysis for Strategic Management.          West Publishing

  1. Lusch and V. Lusch (1987). Principles of Marketing. Kent Publishing,

Brian T., (2000). The 100 Unbreakable Laws of Business Success. Barrett, Koehler Publishers.

Michael A. & Jude K., (2005). Strategic Planning for Nonprofit Organizations. Second Edition.    John Wiley and Sons

Levine, D., & M. Boldrin., (2008). Against intellectual monopoly. Cambridge University   Press.   pp. 312

Dayananda D, Irons R, S Harrison – J. Herbohn, (2002), Capital Budgeting: Financial      appraisal of investment projects – Cambridge University Press. pp. 150

Grier C. &Nagalingam, V. (2000). CIM justification and optimization. London: Taylor & Francis pp. 36.

Khan, M. (1993). Theory & Problems in Financial Management. Boston: McGraw Hill Higher     Education.

Fleisher C., & B. Bensoussan, (2003): “Strategic and Competitive Analysis: Methods and   Techniques for Analyzing Business Competition.” Prentice Hall,

Gordon I., (1989). Beat the Competition. How to Use Competitive Intelligence to Develop             Winning Business Strategies. Basil Blackwell Publishers, Oxford/UK

Gordon I., (1989). Estelle Metayer., (1999).”Demystifying Competitive Intelligence” Ivey   Business Journal, Nov

Porter E., (1998). Competitive Strategy: Techniques for Analyzing Industries and Competitors.       NY Sage


Get Professional Assignment Help Cheaply

Buy Custom Essay

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

  • Plagiarism free papers
  • Timely delivery
  • Any deadline
  • Skilled, Experienced Native English Writers
  • Subject-relevant academic writer
  • Adherence to paper instructions
  • Ability to tackle bulk assignments
  • Reasonable prices
  • 24/7 Customer Support
  • Get superb grades consistently

Online Academic Help With Different Subjects


Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.


Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!


While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.


Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.


In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.


Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.


We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!


We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.


Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

  • When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
  • We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

  • The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
  • We will have a different writer write the paper from scratch.
  • Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment  Help Service Works

1.      Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2.      Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3.      Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4.      Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

smile and order essaysmile and order essay PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!

order custom essay paper