CURRENT AND PROJECTED FINANCIAL

STATEMENTSThe financial section has three elements:

• Identification of risks

• Competitors cutting costs

• Costs exceeding projections

• Demand for your product or service declining

• Financial statements

• Pro-Forma Financial Statement

• Funding request and return on investment

Chapter 5Slide 1

ADDITIONAL ELEMENTS OF THE BUSINESS PLAN

Some businesses need to provide additional information in their business plans related to:

Chapter 5Slide 2

LicensingLegal restrictionsRegulations

Components Of The Operations Section

• Licenses & Permits

• Insurance Required

• After Sale Service

• Threats To Your Business

Licenses & Permits

• Under the operation section of your business plan be sure to provide the reader with information on any licenses and permits your planned business venture may require.

• The licenses and permits required will certainly depend on your particular business endeavor.

Licenses & Permits

• For instance, an entrepreneur building a licensed restaurant will be required to obtain a liquor license, a building permit, a zoning permit, and a license from the health department for kitchen equipment and ventilation.

Examples of Places To Look

Local Small Business Administration Food and Drug Administration

Business Service Centre (Canadian residents) Customs Border Services

Local Chamber of Commerce Office Department of labor

State/Province Revenue Division Department of Building

Internal Revenue Service (IRS) Department of Environment

Revenue Canada (Canadian residents) Department of Justice

Industry Canada (Canadian residents) Department of Industry

Your State/Provincial Department Department of Finance

Department of Business Development State/Provincial Treasury

Foreign affairs and International Trade A Lawyer

Worker's Compensation Board An Accountant

Business Development Bank of Canada Local City Hall

Department of Health and social services Department of Transportation

State Department of Commerce Department of health & Safety

Insurance Required

• The operation section should also indicate the types of insurance your proposed business venture will need.

• The type of insurance a business will need certainly depends on the nature of the business.

Examples of InsuranceGeneral Liability Insurance Term Life Insurance

Product Liability Insurance Medical Insurance

Automobile Liability Insurance Group Insurance

Fire & Theft Liability Insurance Worker's Compensation Insurance

Business Interruption Insurance Shareholders' or Partner's Insurance

Personal Disability Insurance Overhead Expense Insurance

Key Person Insurance Malpractice Insurance

Business Loan Insurance Errors and Omissions Insurance

Crime Insurance Glass Insurance

Personal Insurance Marine Insurance

After Sale Service

• In general, after sales service means providing additional 'offerings' to the customer even after he/she has purchased your product.

• Many after sales services exist such as warrantees, repair services, restoration and cleaning, installation of product, removal of product from customers' premises, extended credit terms, and sales returns, just to name a few.

Threats

• A threat is an external factor (outside the business) that may effect the performance of your business. The most obvious effect would be a reduction in corporate sales

Examples of Threats

• Government Regulations

• Economic Environment

• The Weather

• Changing Customer Patterns

• Product Liability

• Technological Changes