What should a financial plan in a business plan include?

A financial plan in a business plan should include projected income and expenses because it provides a comprehensive overview of the anticipated financial performance of the business. This projection allows business owners and potential investors to assess the viability and sustainability of the business model. By detailing expected revenues from sales, expenses associated with operations, and any other financial obligations, the financial plan establishes a roadmap for managing cash flow, understanding profitability, and identifying funding needs.

While personal savings, marketing budgets, and employee salaries play significant roles in the overall business operation, they do not encompass the broader financial forecast necessary for analytics and strategic decision-making present in the financial plan. Projected income and expenses are central to assessing the business’s future, making it a crucial element in any well-structured plan. Properly forecasting these figures also helps in preparing for potential challenges and ensuring the long-term success of the business.