Business Plan Models, Financial Templates, and Software Packages...

Will Your Business Plan Models Support or
Undermine Your Credibility?

It’s crucial to support your financial projections and estimates with thorough research and verifiable evidence. Business plan models, financial templates and software can help you avoid using general, unsubstantiated claims of market share, sales revenues, expenses, growth, and so on and help you defend your plan when it’s challenged and establish instant credibility with potential investors.

If your numbers don’t fit logically to the arguments you present or the case you’re building, potential investors will see right though your business plan. That’s why you need to be prepared to back up all your assertions with business plan models that show investors how and why they can make more money by investing in your business.

No matter how much you hate “the numbers,” learn how to read and interpret your financial statements. After all, they are your numbers. No matter who prepares them for you, you are expected to know and understand them; don’t let yourself be intimidated by them. Use business plan models, templates and software packages to evaluate your plan financially, and to present your numbers to investors.

Remember, investors buy cash flow streams and will only pay you for the economic value (cash) you can generate – and that’s what the numbers are all about!

“Do the Math”

Before you invest much time in your venture, make sure you run the numbers through a business plan model, financial template or software package to determine how much revenue (cash in) you can make and how much expenses, working capital, equipment and facilities (cash out) you’ll use. Spread your analysis over the first 24 months, then yearly for years three, four, and five. If your plan doesn’t generate cash, then you either need to do more research to see what operating changes you can make, change your strategy, make other adjustments, or ABORT!

Here are the three basic financial statement reports you’ll need to pull together and review:

  1. The statement of earnings (P&L, Income Statement), which summarizes the results of the company’s business operations (revenue and expenses)
  2. The statement of financial position (balance sheet). It lists the company’s assets and the claims against them: liabilities and stockholders’ equity
  3. The statement of cash flows (cash flow statement), which measures the flow of cash into and out of the company

Business plan models and financial statements are the starting point for reviewing and understanding how what you plan to do will translate into cash.

A word of caution: never accept a financial page at face value – and don’t expect your investors to, either. It could be a big mistake.

Make sure you always do your homework, to understand that the information presented makes sense and supports the bigger picture. Click here for 10 Steps to help you Simplify your Business Plan Financial Statements.

It should come as no surprise that most people find doing the financial projections as the most difficult part of completing their business plan. Read my latest article on Business Plan Financial Projections: Yes, you’ll be exactly wrong...but you can be competent.

Accounting and finance are complex areas that require specialized knowledge. In fact, one of the main reasons why people use business plan models, financial templates or software packages is to simplify building their financial statements.

While the business plan models listed below do make “crunching the numbers” easier, if you have little or no accounting experience get the help you need from an experienced financial advisor to be sure your numbers are right.

Using Business Plan Pro

Business Plan Pro by PaloAltoSoftware is a complete software package that helps you write your business plan and prepare your financial statements. While the package leads you through every step of creating your business plan, the financial section can get complicated to those not familiar with preparing financial statements.

The package does offer much flexibility. For example, you can break sales out by a number of product categories with specific cost or margin assumptions for each product. Likewise for expense categories. Business Plan Pro also allows you to select certain assumptions about balance sheet accounts like accounts receivable collections and terms for your accounts payable. All important assumptions used to calculate cash flows. Another benefit with Business Plan Pro is that you can easily change your assumptions to run "what-if" scenarios.

One thing to be careful of with Business Plan Pro or business plan models, financial templates and software packages in general is to be sure your plan doesn't scream "written with BP software" or "amateur." These types of plans often end-up getting trashed. So, don't get lazy and just fill in the blanks or copy someone else's plan. Put in the effort. Do your homework and your research. Build an original business plan model.

Using Business Plan Pro to write your business plan can be helpful. It will create a very cookie-cutter type of plan and scream "written using software," BUT it will guide you through the business plan process, building your business plan model, and motivate you to complete your plan.

My suggestion is to use Business Plan Pro to get started, then customize your plan by following the tips and techniques in the Business Plan Secrets Revealed - Business Plan Manual. They can help you create a plan that separates your business venture from the competition and attracts the attention of professional financial people - investors, venture capitalists, angel investors, bankers, and so on.

There are a few things I'd like to see changed in Business Plan Pro, but over all it does what you need it to do to get your plan done. Used properly, it can create a great looking document, while helping you to better understand and grow your business.

Business Plan Pro includes:

  • Help at Every Step with instructions and examples to build your plan quickly and easily
  • 400+ Sample Plans can give you a jump-start for ideas for start-ups to on-going business plans
  • An EasyPlan Wizard® to guide you through every step of business plan process from start to finish
  • A generally accepted business plan format that discloses what banks, lenders, and VCs are looking for
  • Resources to help you define your business, compare industry ratios, set schedules, create personnel and mini-marketing plans, and find funding

What about Ultimate Business Planner® ?

If you're seeking venture capital or direct investment, then using business plan models, templates and software packages to prepare your plan can be a cost-effective solution especially if you're tight on time. I've found the Ultimate Business Planner® to be a simple, easy to use business plan software.

It is not as flexible as Business Plan Pro but the advantage is a much more straightforward program. For example the financial section and the business plan sections in the Ultimate Business Planner® are separated; making it easy to focus on the task at hand. I also like the simplicity of the financial section. You can list up to 20 products and 20 expense items. And, it prompts you step by step through the creation of your financial statements. Including opening balances, required assumptions for cash flow projections, and easy to set-up loans, notes and credit lines.

A few limitations however are that the software only handles up to three years. Also, although the software allows you to change gross margin by product, I wasn't able to find a way to change the gross margin of a product by period (month or year). That said, you can still quickly create a professional looking business plan and set of financial statements with the Ultimate Business Planner®.

If you're concerned with style, follow the tips and techniques in the Business Plan Secrets Revealed - Business Plan Manual to modify your plan so it will standout in the minds of investors and more importantly move them to take action.

While the Ultimate Business Planner® is certainly a time saver, it's important to go through the exercise of building your own business plan model. So, work through the fundamentals of your venture. Try the Ultimate Business Planner®. Then incorporate the tips and techniques revealed in the Business Plan Secrets Revealed - Business Plan Manual to write a powerful investor oriented business plan that can raise capital for your business.

Here's what the Ultimate Business Planner® includes:

  • A step-by-step approach that makes business planning fast and simple
  • Over 1,000 indexed business plan samples and 25 complete sample plans to help you get started
  • Hundreds of business start-up resources
  • Projected P&Ls, Cash Plans, Balance Sheets, Financial Ratios, and more!
  • “Plain-English” instructions, advice and how-to hints
  • Links to QuickBooks

Click here for a complete on-line
demonstration on building
business plan models with
Utlimate Business Planner®

How about Excel financial models?

Building your own Excel financial template or business plan model gives you tremendous flexibility...if you understand financial accounting. Financial statements are very integrated. The balance sheet, income statement, and cash flow statement all work together and feed each other.

However, I recommend you avoid trying to build your own Excel financial spreadsheet or business plan model unless you are trained or educated in accounting.

That said, there are many Excel templates available on the web. But I caution you that some of the spreadsheet templates and excel business plan models I've tested have major flaws in them. I've contacted the providers of these flawed templates and am amazed when they respond with surprise, saying that of all the "thousands" of templates they've sold no one has ever pointed out the errors I found.

Of course the users of these templates are not financially astute enough to be able to point out these problems - nor should they be. They're relying on the template provider to ensure the financial integrity of the template or business plan model. The troubling part to me is that these providers are actually charging and getting paid for these templates and models.

Well, enough of the warnings.

The PriceWaterhouseCoopers excel financial template will help you build a balance sheet, income statement, and cash flow projection for your business. It also has instructions to help walk you through the process. I suggest you combine the template with the financial section of Business Plan Secrets Revealed - Business Plan Manual . It will help you understand many of the financial terms, how to use them, and how to incorporate the information into your business plan.

Remember business plan models, templates, and software are helpful but not necessary to create a business plan. The Business Plan Secrets Revealed - Business Plan Manual includes a business plan outline, tips and techniques for writing and presenting your plan from the viewpoint of an investor, and guidelines for finding and presenting to investors. It also has an entire chapter dedicated to understanding and using financial statements. So, whether you use business plan models, templates, and software packages to prepare your plan or not, you'll want the Business Plan Secrets Revealed - Business Plan Manual by your side.

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