Understanding Financial Plans

Why is a financial plan summary important?

• It helps stakeholders understand the financial picture.

• It is a detailed financial report.

• It is not necessary for business plans.

What are assumptions in a financial plan?

• Guaranteed facts about the future.

• Educated guesses or expectations.

• Random guesses without basis.

What is an Income Statement?

• A report showing how much money a business earned.

• A document for tax purposes only.

• A summary of employee salaries.

What does SG&A stand for?

• Selling, General, and Administrative Expenses

• Sales, Goods, and Administrative Expenses

• Standard, General, and Administrative Expenses

What is the formula for Gross Profit?

• Sales Revenue - COGS

• COGS - Sales Revenue

• Sales Revenue + COGS

What is the expected demand pattern for a cupcake business in December?

• More sales due to Christmas and parties

• Less sales due to rainy season

• Stable sales throughout the year

Why is Exit Strategy Important in a Feasibility Study?

• Shows investors or partners that you are prepared for the long-term

• Helps manage risks and potential business failure

• Makes your plan professional and complete

• Provides a clear direction if the business does very well or very poorly

What are the possible exit strategies for a business?

• Liquidation or Walkaway

• Bankruptcy

• Selling the Business

• Family Succession

• Taking the Company Public (IPO)

Why is Socio-Economic Contribution Important?

• It shows that your business is not just focused on profits, but also on helping people and the community.

• It helps attract investors who want to support businesses that contribute positively to society.

• It can help build a good reputation for the business, leading to customer loyalty and trust.

How do references and appendices contribute to a feasibility study?