Investment budget and business plan

Financial Plan

Investment budget and business plan

Putting their activities associated with complement a series of formalities and filling a lot of documents. Therefore, the few entrepreneurs in time to prepare for the opening of his own company decides to create a business plan or investment budget, considering it unnecessary paperwork, especially in the case of a sole proprietorship business or company without the small size of the initial capital has no such obligation. On the other hand, the preparation of such documents can be very useful during the development of their business, not to mention the moment when we want to transform our humble company of advanced company. Analysis of company financial data and realistic plan for its development are necessary for applying for a grant or a loan, because I do not speak to the bank or institution granting the subsidy, the physical and tangible business plan. So let's learn how to build a business plan and investment budget, how to update them so that they become a useful tool for business development.

How does it differ from a business investment budget?

The business plan is a plan for economic development of the company or other przesiewziecia. While the investment budget is a statement of revenue and expenditure of the company or other organizational unit provided for a specific period of time. Both documents refer to the company's finances, describe their current state and financial forecasts for the next period, taking into account the possible and desired financial plan.

The business plan describes a much wider range of activities than the investment budget. In addition to the business plan budget includes market analyzes, which take into account possible factors for business development, as well as those that can inhibit its growth. In addition, the business plan contains information about customers, contractors, suppliers, competitor analysis, and the most important thing, which is the exact description of the development plans of both the short and long term. In a good business plan will be a company history with a description of current activities and lessons learned after their implementation.

Investment budget only applies to the company's finances, describes their real value and is based on facts and science calculations. The budget includes data on revenues and expenditures of the company and information about what part of the company's assets can be used for investments. The assumptions of the budget are also possible deviations from the assumed plan. Create both a business and investment budget is not mandatory for small companies, but may be useful in the later stages of their operation. Banks and potential investors usually require a business plan as a document accurately describing your company and its capabilities. We can not forget that the business needs to find also well prepared budget.

Creating a budget investment company

Properly prepared investment budget must be based on a thorough financial analysis, taking into account the company's balance sheet, summary of financial records and financial statements. Its most important point is the same finance separated on revenues and expenses of the company. A good practice is to share both costs and revenues into smaller groups.

In small enterprises of the cost can be divided into expenditure on salaries for employees, telecommunications services or the purchase of materials needed for production. In the case of revenues, the matter is complicated because some purchases do not bring any revenue directly, but it is essential for the functioning of the company. Revenues can be divided, therefore, either because of the type of goods or services, or target group. For larger companies the case is a little easier, because you just created small budgets for individual departments, which taken together give a full budget for the entire company.

At the time when the analysis of revenues and expenses is ready, you can determine whether the company has a budget surplus and what is its height. Additionally, you will notice, in which sites can or should cut costs, and in that it is worth more to invest. It is here that begins the investment part of the budget. Experts advise to plans for the company's development plan divided into pragmatic and assumptions over it. Pragmatic Actions things related only to its core business companies that are expected to bring steady profit and keep the company on the market. On the other hand the plan over this describes everything, what the company would like to accomplish in addition to its core business and that is used for its development. Knowing the assumptions of both plans, you will be able to find the right balance that will allow for proper operation every day and at the same time enable the company to develop.

A business that is planning the future of your company

Preparing a business requires much more time and work than the investment budget. In addition to gathering information about the company itself should also gather data about its surroundings. It is good to start with the market analysis, which describes its structure and behavior, including target groups, customers, suppliers, competitors, market size and opportunities for its expansion, etc.. It should also carry out an analysis of external factors (PEST analysis) Taking into account economic, political, technological and socio-environmental factors that may affect the running of the company.

After the completion of the market analysis should focus on the analysis of the company's internal and consider what were the stages of its development and plans for each of them and what achievements can boast. It should also describe the current situation of the company, taking into account data such as number of employees or size of production. The more detailed information you will find yourself in the business, the more potential investors will be informed about the profile and capabilities of the company's development. Then bizneplanu accompanied by investment budget and on the basis of all analyzes carried out a short summary. It is worth it to spend more time, because this summary is extremely important. Most potential investors do not have time to become acquainted with each wielostronnicowym business plan, because their decisions based just on this short description.