Financial
Projections: Mistakes
to Avoid
Here are some of the most common mistakes
found in the financial projection sections of business plans:
- Failing to include the "Big 3" statements
and projections (income statement, balance sheet, cash flow).
- Presenting sales and profit projections
that are unrealistic and unfounded.
- Omitting financial assumptions to explain
where the "numbers" originated.
- Presenting "creative" rather than "accepted"
financial statements.
- Underestimating expenses and not budgeting
for unexpected costs.
- Lack of financial investment on the part
of the founders.
- Including excessive salaries and office
expenses at start-up.
- Offering a lower percentage of ownership
than the investment requirement demands.
- Offering a return on investment that
is out of line for your industry.
- Absence of contingencies and projections
for worst case scenarios.
- Financial statements that are not prepared
or reviewed by a reputable accountant.
For more information about preparing the financial projection
section of your business plan, check out:
Email us at BizPlanIt if you have comments or suggestions
about our Virtual Business Plan.
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