The Financial Section of a Business Plan
Posted by in Business Plan on May 24, 2011
Financial section of the business plan
The purpose of the majority of business plans is to raise finance. Many investors will skip to this section of the plan instead of reading the plan in sequence. A mixture of financial projections and narrative are provided to help the investor understand the financial health of the business venture. Investors need to know the amount of money required to establish the business. Depending on the type of business, some of this money may be recoverable should the business fail before trading. The financial section needs to provide a realistic overview of the profitability and cash flow of the business. The rate of return on investment and payback period are key concerns to any investor regardless of their impression of the management team or the market for the product. Projections are usually provided for a 3 year period, the first of those years will include a breakdown by month. A business with a longer time to revenue and profitability may wish to show projections for 5 years plus.
Projections
The statements will include profit and loss accounts, balance sheets and cash flow statements. Detailed product costing must be provided to show the costs related to selling the product or service. Costing should be provided for each significant product or service offering. Breakeven analysis is supplied to show the investor how many units of the product or service must be sold to cover businesses costs.
The figures used in the projections must correspond with other sections of the business plan e.g. if the operational section states that three people will be employed in year two, the profit and loss account in year two must include the cost of those three employees. It is useful to summarise any significant assumptions made when preparing projections e.g. seasonal sales. It is possible to include additional detailed financial workings in the appendix of the business plan. Read the rest of this entry »
Understanding Your Marine Cargo Insurance Plan
Posted by in Project Planning on May 24, 2011
Have you ever wondered what happens if your goods in transit through cargo holds of large ships which carry containers, get damaged while handling? Well, you do not pay a cent for recovering the cost of the damaged goods because your marine cargo insurance does it for you.
Marine cargo insurance is an important concept to understand especially if you frequently transit your goods through carrier vessels. Such insurance is usually provided by all those companies that transport large quantities of cargo. Since there are always chances that the goods being carried could get damaged because of the weather conditions or poor handling by the people involved in the transit, it is always better to opt for insurance.
Due to the increased volumes of the goods that are always kept in transit throughout the world, marine cargo insurance has become a highly specialized as well as a regulated industry. You may not get a government approved insurance plan for your boat, but be certain that you will get the most excellent options for your marine cargo insurance.
There are basically three kinds of marine cargo insurance plans. The first and the most common of all insurance is the open cover insurance. This insurance is drawn to cover a number of consignments that are being shipped. This kind of policy can be for a specified amount and lapses when the amount of insurance covered is claimed, or can provide an open cover for a specific period of time. People who have large volumes of goods in transit usually prefer this kind of insurance plan.
The second type of marine cargo insurance is the specific voyage policy. This is not a usual norm in this insurance sector. However, this policy is usually used when you want to make a one time or a specific insurance policy for a particular consignment. Read the rest of this entry »