Writing a Business Plan

Financial Section

Overview of the Economy
Overview of the Industry
Sources for Funding
Capital Equipment
Balance Sheet
Break-Even Analysis
Income Projections
Cash Flow Projection
Deviation Analysis
Historical Reports for Existing Business

Overview of the Economy


Overview of the Industry

Consult the web guide, How to Find Industry Information for database resources that provide overviews and reports of many industries.

Sources for Funding


Books can be useful in locating sources for funding a business. You can find books in the Baker University Library catalog. Some are even available in electronic format.

In the Baker University Catalog,
          use the terms:
                small business finance
                new business enterprises - finances
venture capital

Other resources you may find useful:
(Books may be requested on interlibrary loan, OR, once you select a title, use the Worldwide libraries own this item link to locate a library near your home where you can find the book.)

  1. BooksAngel Investing: Matching Startup Funds With Startup Companies: The Guide for Entrepreneurs. Mark Van Osnabrugge. Jossey-Bass, 2000.
  2. web site Business Finance.com
  3. Books Corporate Finance Sourcebook. Reed-Elsevier, annual.
      This directory includes venture capitalists, private lenders, commercial banks, investment banks, business intermediaries and more.
  4. Books  Directory of Venture Capital and Private Equity Firms, Domestic and International. Grey House Publishing, 2010.

  5. PeriodicalsEntrepreneur Magazine's Financing Your Small Business: How to Raise the Money You Need. Entrepreneur Media, 1999.
  6. web site National Venture Capital Association
  7. Books  Government Assistance Almanac. 2013.       
             This source provides information on all kinds of domestic programs available from federal agencies which help users obtain assistance.
  8. Books  Home Office and Small Business Answer Book: Solutions to the Most Frequently Asked Questions about Starting and Running Home Offices and Small Businesses.    2nd. ed. Janet Attard. Henry Holt, 2000.

  9.  e book How to Find Money Online: an Internet-based Capital Guide for EntrepreneursAlan Joch. McGraw-Hill, 2001.
                      You will be able to log into it directly, using your Baker library ID.
  10. web site PSEPS
    "The world's largest open private equity and venture capital database."You can browse an alphabetical listing or search the database by country, city, and/or industry. Listings include information such as an overview of the firm, investors, employees, location, and website.

  11. Books  Pratt's Guide to Private Equity and Venture Capital SourcesCapitol Publishing. Annual.
    This is the best-known directory of capital venture sources. Contact information and funding preferences are given for each investor. Articles regarding the venture capital   industry and funding processes are included.

  12. e book Raising Capital: Get the Money You Need to Grow Your Business.  Andrew J. Sherman. Kiplinger Books, 2000.
                     You will need your Baker library ID to log in.
  13. web site Small Business Administration
  14. web site Small Business Development Centers
  15. web site U.S. Business Advisor


Capital Equipment


  • Equipment used to manufacture a product, provide a service, or sell, store, and deliver merchandise
  • NOT equipment used in the normal course of business but equipment one will use and wear out as one does business.
  • Does not include items expected to be replaced annually or more frequently.
    1. website ThomasNet
      Find suppliers for more than 67,000 categories.
    2. The Internet, in general.
    3. Vendor catalogs
    For start up costs, see:
    Starting Costs Calculator
    • You can use this calculator to quickly determine your:
      • Cash Flow
      • Break-even
      • Monthly Profits
      • Investment Required
      • Money at Risk


Balance Sheet



Comparative Sources (used for benchmarking)



Break Even Analysis


  • Provides a sales objective at which your business will break even.
  • Sales=Fixed Costs + Variable Costs
  •  Sales=Fixed Costs / Gross Margin (profit on sales)


Income Projections


You should produce:

  • Three Year Summary
  • Detail by month for first year
  • Detail by quarter for second and third years
  • Notes of Explanation
      Some explanations can produce:
    1. best case scenarios
    2. worst case scenarios
    3. most likely scenarios.
  • Profit and loss statements.
  • Complement the balance sheet
  • Provides a moving picture over a period of time.
  • Again, use publications such as RMA or trade associations for comparisons.


Cash Flow Projections


You should produce:

  • Detail by month for first year
  • Detail by quarter for second and third years.
  • Notes of Explanation
    1. Shows how much cash your business will need.
    2. Details whether to seek equity, debt, operating profits, or sale of fixed assets.
    3. Shows where the cash will come from.



Deviation Analysis


  • Looks at the various parts of the business.
  • Are some parts doing better than others?
  • Are you deviating more from projections than expected in certain areas.


Historical Reports for Existing Business