Operational Plan / Operational Guide
Requirement for financing

Financial Information

Historical Financial Information

1.	Past 3 years financial statements. Include income statement, balance sheet, tax returns.

Current Financial Information (data should be w/in 60 days current)

1.	Income statement YTD (Year to date)
2.	Balance sheet. Include A/R, A/P (with aging analysis and inventory information.
3.	Cash flow statement

Financial Projections (at least 3 years of projections)

1.	Income statements           (Year 1: monthly; Year 2: quarterly; Year 3: quarterly)
2.	Cash flow statements           (Year 1: monthly; Year 2: quarterly; Year 3: quarterly)
3.	Balance sheets
4.	Critical items to be identified:           Cash position           Retained earnings           Inventory (actual / changes)           Accounts Receivable (A/R) and aging           Accounts payable (A/P) and aging           Assets / Liabilities           Equipment / Capital improvements

You should identify in a separate section, the application of funds if business plan is being used to obtain financing. Some issues which should be addressed in the application of funds section are:

Equipment purchase (enhance / increase production capabilities)
Capital improvements (real estate modification, expansion)
Inventory
Debt restructuring
Working capital
Other (need to specify)

You should identify in the financial projections, the ability to service new debt. New debt should be listed as a separate line item to assist with identifying impact analysis.

All financial data should relate to existing AND projected activities. How much will your business grow on it’s own, and how much will it grow due to the injection of capital?

1.	You need to "prove" a positive impact resulting from injection of capital.
2.	Perform an industry comparative analysis. Your financial projections will be reviewed and compared to the financial data available for your industry. Explain how your financial projections compare to industry standards.
3.	Make sure that the financial information you provide is realistic, reasonable, and is supported by the text of your plan.

"If your plan does not make sense to them, they won’t give their cents to you!!"

1.	CASH FLOW:   You will need to prove an ability to maintain an adequate cash flow on a periodic basis (weekly, monthly) to service existing expenses and old and new debt. Projected income statements do not necessarily identify inadequate cash balances, but cash flow statements will.
2.	PROFIT CENTERS:   You need to specifically identify all pertinent profit centers. Does one portion of your business generate more revenues while another generates more profits? How will you use injection of capital to leverage revenues and profits? How will you monitor and control risks and exposure?
3.	FINANCIAL STATEMENTS:   Make sure that you and your staff fully understand the different types of information which is conveyed in: Income Statements, Cash Flow Statements, and Balance Sheets. Your understanding of this financial data will provide an increased level of security to potential lenders.
4.	AGING:   The aging of payable and receivable accounts is a critical indicator of your financial performance. Delinquent collections or payments is a clear indication that something is not working properly. There should be contingency plans in place to address either of these problems to protect the financial viability of the company and to reduce future risks.
5.	EXECUTIVE SUMMARY:   This document should clearly and concisely describe the current and projected activities of your business, use of funding, products/services, marketing efforts, and management. It should be less than 2 pages in length!

There are additional guides available on the development of business plans. Whether you are seeking additional financing, or, just looking to create an operational guide for your business, a business plan is a critical document which should be used by your business to guide current and future activities.

For additional information, we recommend you review some of the other resources available on our web site at: http://www.deionassociates.com