How to make a financial plan

What is in a financial plan?

A financial plan clarifies your business idea in figures. A good financial plan shows whether your business plans are feasible. And you can see what happens in your business bank account each month. 

Your financial plan should include at least the following: 

• how much money you need to start or grow your business
• the expected turnover, purchasing costs, and other costs 
• the expected profit for the coming years  
• how you will pay for or finance your investments and under what conditions

Business budgets

The financial plan always consists of 4 sub-budgets. Together, they provide a clear picture of how your business is doing financially and will do in the future:

• Investment budget
  Here you list the investments needed to start or grow your business. For example, equipment, inventory, or business premises. And what these cost.
• Financial budget
  Here you show how you will pay for the investments from the investment budget. For example, with your own money, with loans, or with external investors.
• Operating budget
  This is where you calculate whether your business is profitable. You estimate your turnover. Then you look at what the costs are to keep your business running. This is how you calculate whether you will make a profit or a loss. The operating budget is also known as the profit and loss account.
• Liquidity budget
  This lists all your expected income and expenditure per period. This gives you insight into your cash flow, how much money is coming in and how much is going out? You can estimate how much is in your business account at any given moment. This helps you to see in good time whether you have enough money to pay bills, wages, and other costs.

It is also useful to make a personal budget. This is an overview of your fixed costs and expenses. Then it becomes clear what amount you need to earn as an entrepreneur to live on. If you know this, you can also determine or adjust your hourly rate.

Pitching to a financier

Do you need financing? Then you can turn to financiers or investors. They will assess not only your figures, but also you as an entrepreneur. They look at who you are, what your business does, and how strongly you can justify your plans. So, make sure you have a clear presentation and a strong pitch. 

You should show the financier:

• That you have confidence in your company
• That you are well-prepared
• What your qualities are as an entrepreneur and what experience you have
• That you have relevant contacts and a good network

Supporting your plan

A financier must be able to see from your plan if investing in your company is worthwhile. In any case, you should include:

• a clear explanation of the numbers
• which trends, developments, and risks there are in your industry
• insight into your target group and the market
• what exactly you are going to spend the money on
• insight into the costs of your company (for example, rent of a building or personnel costs)
• what you must earn to meet all financial obligations (business and private)

Use tools for your situation

The Netherlands Chamber of Commerce KVK provides information that you can use for your financial plan.

KVK Location Scan

The KVK Locatiescan (in Dutch) provides information on the number of businesses and population in your region. After completing a few simple step, you will receive an email with your own information sheet and Excel file. KVK developed the location scan together with Statistics Netherlands (CBS).

Get your location scan (in Dutch)

KVK Company Counter

With the KVK Company Counter you can easily check how many companies in your industry operate in your region. That way, you know how many competitors there are.

Count the competitors in your region

Example of a financial plan

You will find an example of a financial plan on the Qredits website (in Dutch).

Personal money plan

There are financial risks involved in running a business. With the Geldplan ZZP (in Dutch) of the National Institute for Family Finance Information (Nibud) you can limit these risks. Answer a few questions about your situation anonymously and read about your financial situation in your personal money plan. Also find out what you can do to get a better grip on your finances.