In many cases, the financials are one of the first Job Function Email List sections of the business plan to be read by investors. This part of the plan informs the reader the amount Job Function Email List, sources and timing of the funds required to establish and grow the business. Source of funds The sources of funding could include yourself Job Function Email List, friends and family. Other external sources include venture capital money, specialist funds exist depending on the industry sector your business operates.
Financial institutions offer a range of loan and lease products for Job Function Email List businesses. Support is may also available from government agencies in the form of grants Financial projections (discussed in article 3) should Job Function Email List clearly illustrate the funding needs of the business for the first three years. The projected cash flow will show the cash injections required to fund the business. The investor needs to understand the amount of money Job Function Email List required to initially start the business and any ongoing funding requirements. You must clearly distinguish between capital business development needs and Job Function Email List working capital amounts e.g. you could refer to the cash flow projections demonstrating Job Function Email List the amount needed to buy stock in month three of Year 1 or the amount required to cover salaries in month 12 of Year.
An example of capital requirements could be Job Function Email List the purchase of a second piece of machinery in Year 2. The investor may place certain conditions upon their funding e.g. insist that money be spent on product research. Investors are interested in the financial Job Function Email List commitment made by the business promoter for example they may decide to match the amount of funds invested by the promoter There are broad Job Function Email List types of finance available to a business: equity, debt and grants Equity This can be your own or from external sources. Equity investors receive shares in the business in return for their investment.