Issue link: https://docs.hic.us/i/403552
Note: Pro-forma means "projected" in this case. It should be understood that much of your information at this point is based on estimates, rather than true hard data. Pro-forma is an acknowledgement of this situation. The accounting system and the inventory control system that you will be using is generally addressed in this section of the business plan also. If a franchise, the franchisor may stipulate in the franchise contract the type of accounting and inventory systems you may use. If this is the case, he or she should have a system already intact and you will be required to adopt this system. Whether you develop the accounting and inventory systems yourself, have an outside financial advisor develop the systems or the franchisor provides these systems, you will need to acquire a thorough understanding of each segment and how it operates. Your financial advisor can assist you in developing this section of your business plan. The following questions should help you determine the amount of start-up capital you will need to purchase and open a franchise. • How much money do you have? • How much money will you need to purchase the franchise? • How much money will you need for start-up? • How much money will you need to stay in business? Other questions that you will need to consider are: • What type of accounting system will your use? Is it a single entry or • dual entry system? • What will your sales goals and profit goals for the coming year be? If a • franchise, will the franchisor set your sales and profit goals? Or, will he or she expect you to reach and retain a certain sales level and profit margin? • What financial projections will you need to include in your business plan? • What kind of inventory control system will you use? Your plan should include an explanation of all projections. Unless you are thoroughly familiar with financial statements, get help in preparing your cash flow and income statements and your balance sheet. Your aim is not to become a financial wizard, but to understand the financial tools well enough to gain their benefits. Your accountant or financial advisor can help you accomplish this goal. The following financial documents should be included with your business plan. For more information regarding each type of Financial Statement, refer to the designated attachment: 1. Income Projection Statement - Instructions for Income Projection Statement – Attachment G 2. Balance Sheet - Instructions for Balance Sheet – Attachment H 3. Monthly Cash Flow Projection - Instructions for Monthly Cash Flow Projection – Attachment I www.hsi.us care@hsi.us 43