A free example of a financing plan

You will find a financing plan tailored to your project in our list of 200+ financial plans

All our financial plans do include a financing plan.

How can you create a solid financing plan without feeling overwhelmed?

In this article, we provide a free tool to do so. If you're looking for something more tailored to your specific project, feel free to browse our list of financial plans, customized for over 200 different project types here.

We'll also address the following questions:

What are the essential elements of a good financing plan?
How much should be set aside for a contingency fund?
Which financial ratios are important to track to ensure the plan is on course?
What steps can be taken to accurately predict cash flow?
What portion of the budget should be dedicated to marketing?
How can the break-even point for a project be calculated?
What tools are available to help manage and monitor a financing plan?

Here Are the Steps to Create a Solid Financing Plan

To skip all these steps, you can simply download a financial forecast tailored to your industry.

• 1. Break Down the Project into Manageable Phases:

  Divide your business project into distinct phases. For example, Phase 1 could involve market research and product development, Phase 2 could cover initial production and marketing, and Phase 3 could focus on scaling operations. This approach helps you tackle one phase at a time, making the overall project less overwhelming.

• 2. Estimate Costs for Each Phase:

  Determine the estimated costs for each phase. This includes all expenses such as research, development, production, marketing, and scaling. Having a clear understanding of the financial requirements for each phase will help you plan more effectively.

• 3. Identify Funding Sources for Each Phase:

  Explore different funding options for each phase. For initial phases, consider personal savings, small business grants, or loans. For later phases, look into crowdfunding platforms, venture capital, or angel investors. Match the funding source to the specific needs and scale of each phase.

• 4. Create a Detailed Budget:

  Develop a detailed budget for each phase, outlining all expected expenses and income. This will help you keep track of your finances and ensure you stay within your limits. Regularly update your budget to reflect any changes or new information.

• 5. Set Clear Financial Goals:

  Establish clear financial goals for each phase. This includes specific targets for funding, sales, and profitability. Having clear goals will help you stay focused and measure your progress effectively.

• 6. Prepare a Compelling Pitch:

  For phases that require external funding, prepare a detailed and compelling pitch. Highlight your market research, initial sales, and growth potential. Tailor your pitch to the interests of potential investors or backers.

• 7. Monitor and Adjust:

  Continuously monitor your financial plan and make adjustments as needed. Track your expenses, compare them to your budget, and adjust your plan to address any discrepancies. This will help you stay on track and avoid financial stress.

What Should Be Included in a Financing Plan?

Here are the key elements that should be included, all of which you will find in our financial forecasts tailored to 200+ different business projects.

Element	Description	Importance	Estimated Cost & Time
Executive Summary	A brief overview of the business, its goals, and the financing needs.	Provides a snapshot for potential investors to quickly understand the business and its financial requirements.	Minimal cost 1-2 days
Business Description	Detailed information about the business, including its history, mission, and vision.	Helps investors understand the background and purpose of the business.	Minimal cost 2-3 days
Market Analysis	Research on the industry, market size, target market, and competition.	Demonstrates the business's understanding of the market and its potential for growth.	Varies (can be done in-house or outsourced) 1-2 weeks
Marketing and Sales Strategy	Plans for reaching the target market and generating sales.	Shows how the business plans to attract and retain customers.	Varies (can be done in-house or outsourced) 1-2 weeks
Organizational Structure	Information about the business's management team and staffing plan.	Highlights the expertise and experience of the team leading the business.	Minimal cost 1-2 days
Product or Service Line	Details about the products or services offered by the business.	Provides insight into what the business sells and its value proposition.	Minimal cost 1-2 days
Funding Request	Specifics on the amount of funding needed and how it will be used.	Clearly outlines the financial needs and the purpose of the funds.	Minimal cost 1-2 days
Financial Projections	Forecasts for revenue, expenses, and profitability over the next 3-5 years.	Provides a financial roadmap and demonstrates the business's potential for profitability.	Varies (can be done in-house or outsourced) 1-2 weeks
Appendix	Additional information such as resumes, permits, and other relevant documents.	Supports the main sections of the financing plan with supplementary details.	Minimal cost 1-2 days

Our financial forecasts are comprehensive and will help you secure financing from the bank or investors.

Common Questions You May Have

Reading these articles might also interest you:
- How to set up a financial plan for a small business?
- A free example of a financial plan for a small business
- How to calculate working capital requirements for my business?

What are the key components of a solid financing plan?

A solid financing plan should include a detailed budget, outlining all expected income and expenses.

It should also incorporate a cash flow forecast to ensure liquidity at all times.

Finally, it should have a contingency fund to cover unexpected costs or emergencies.

How much should I allocate for a contingency fund?

It is generally recommended to allocate 10% to 15% of your total budget for a contingency fund.

This amount can vary depending on the nature and scale of your project.

Having a contingency fund helps mitigate risks and ensures financial stability.

What financial ratios should I monitor to ensure my plan is on track?

Key financial ratios to monitor include the current ratio, which should be greater than 1 to ensure liquidity.

The debt-to-equity ratio is also important and should ideally be below 2 to maintain financial health.

Additionally, the net profit margin should be monitored to ensure profitability, aiming for at least 10%.

How can I accurately forecast my cash flow?

Start by listing all expected income sources and their timing.

Then, list all anticipated expenses, including fixed and variable costs, and their timing.

Regularly update your forecast based on actual performance to ensure accuracy.

What percentage of my budget should be allocated to marketing?

For a new project, it is advisable to allocate 10% to 20% of your total budget to marketing efforts.

This helps in building brand awareness and attracting initial customers.

As your project grows, you can adjust this percentage based on performance and market conditions.

How do I determine the break-even point for my project?

Calculate your fixed costs, which are expenses that do not change with production levels.

Determine your variable costs per unit, which are costs that vary with production levels.

Divide your total fixed costs by the difference between your unit selling price and variable cost per unit to find the break-even point.

What tools can help me manage and track my financing plan?

Financial management software like QuickBooks or Xero can help you track income and expenses.

Spreadsheet tools like Microsoft Excel or Google Sheets are useful for creating detailed budgets and forecasts.

Project management tools like Trello or Asana can help you keep track of tasks and deadlines related to your financing plan.