Sample Report On Financial Business Plan

Type of paper: Report

Topic: Business, Finance, Venture Capital, Management, Money, Shop, Investment, Family

Pages: 3

Words: 825

Published: 2021/02/18

The success of a new venture begins with a well and carefully designed financial business plan that can serve as a skeleton or basis of the operation especially for the start-up businesses. An entrepreneur, together with his/her accountant, should allocate a maximum limit of capital for operating the business and estimate the time and rate of return on investment. There should also be a prepared financial risk management plan to ensure the profitability and continuity of the business. This paper will discuss and present a financial business plan for a new venture, the children’s pastry and clothes shop in Massachusetts, and identify some ways to improve financial management for business continuity.
The State of Massachusetts is a home for 6.7 million Americans. It enriches itself with its major industries such as tourism, fishing, electronics, textile, publishing, and education (Enchanted Learning, 2015). The Government of Massachusetts has a high concern on children promoting children’s welfare through the enforcement of parenthood support policies and providing educational support such as early intervention needs and services and financing higher education (2015).
Starting a business in Massachusetts seems easier due to the presence of government support. The government provides financial support to start-up businesses, counselling and assistance, and online course for business financing. It has also venture capital funding programs. In establishing business in Massachusetts, the government requires sanitary permits in all aspect of the food business. Among them is the sanitary compliance in management and personnel, food products, utensils, linens, water, plumbing, and sewage system, and physical facilities (Government of Massachusetts, 2015).
The government also requires documents for compliance and enforcement such as purpose of products and services, facility and operating plans, construction inspection and approval, permit to operate, inspection and correction of violation, investigation and control document for the prevention of food borne disease transmission by employees (US Food and Drug Administration, 1999).

Start-up costs

Tim Berry discussed in his Bplans article that entrepreneurs and accountants need to estimate a realistic start-up cost (2015). He noted three key start-up costs namely start-up expenses, start-up assets, and start-up financing. Start-up expenses are the pre-planning costs including marketing materials, business permits, government requirement and the likes. Start-up assets include inventory, capital on machines and equipment, real estate, products, and employees. Start-up financing includes the capital investments and loans relating to business. After the first month of operation, start-up financing may be tabulated in the cash flow ledger/entries (Berry, 2015).
In the case of children pastry and clothing shop, the entrepreneur and the accountant needs to consider the start-up cost such as government and sanitary permits, leasing place, interior decorations and marketing materials such as logo, billboard, tarpaulin and pamphlets, product inventory including pastries, beverages and clothes, pastries container and pastry racks, refrigerator, plates, platter, glasses, silverware, clothing racks and hangers. One should also consider the first month salary of one to two sales ladies.
The said business requires little costing of equipment as it only requires few clothing racks, pastry container, microwave oven, and refrigerator. Other expenses needed be considered are the food and clothing products, employees cost, and space rental. According to, the rental rates for commercial space in Massachusetts are at manageable costs (2015). Below is the estimated start-up cost for Children’s Pastries and Clothing Shop.
After a month of operation, the cash flow statement shall be prepared. Tarra Kimball of the Small Business Chron news organization stated in her article that there are four components of the cash flow statement namely operating activities, investment activities, financing activities and supplemental information (2015).
Operating activities are the money received and spent during the operation at a certain period of time while the Investment activities are the money received and spent for investments. Financing activities are the purchases on bonds, stocks, securities and other financial instruments while the Supplemental Information is the statements on the interest rates earned, amount of tax paid and the likes (Kimball, 2015). All of these components should be present in the cash flow statement of the children’s pastries and clothing shop. The entrepreneur and the management of the shop should target at least 20 percent returns on operating and investment activities and at least 12 percent return in the financing activities for a profitable venture.
It is advisable to have a fix cost on operating activities but a varying target profit depending on the market trends. However, the management should set a minimum acceptable profit which is enough to continue the operation and vary pricing of products depending on the marketing strategies to maximize profit. For example, a 20 percent return on a French bread can maximize to 40 percent by adding variety of a good quality brand acquired at a lower cost but can be sold on a higher market price.
The investment activities should be added to the per unit capital price of each product to recover the cost incurred in the first few months of operation. Such will eventually turn to additional profits once the investment costs were recovered. The manager should set a maximum of six months return on investments and set the unit price at a profitable value but within the industry price. Financing activities should have expected returns after six months.
Given the 6 months expected returns and ROI, it is very important for the shop to strengthen its operation activities during the first month. Such can be achieved by applying effective marketing activities and choosing strategic location for the shop. As the children’s pastry and clothing shops caters to the needs of the 2 years -14 years old children, it is highly advisable to choose a shop location near areas of educational institutions in which the students belong to the middle to upper class families. Such location strategy can result to sustainable and high volume sales as the shop is situated in the place of the target markets.
Further, marketing strategies such as flyering, discounts programs for new buyers or high volume buyers, and provision of freebies for a certain amount of purchase can develop a long term client relationship to its customers. The managers should establish shop loyalty among its client from the very first day of operation by providing freebies program, quality products, and commendable customer services. Such strategy can lead to an early success on operating returns that could continue the business until the expected returns on investments and financing after six months will be added to the operational profits.
Budgeting is an important management tool. Desjardins’ website noted that budgeting helps an entrepreneur set a realistic spending goal and limit expenses (2015). Maria Gustafasson and Rebecca Parson of the University of Gothenberg said in their study entitled “Budget- A Perfect Management Tool? ” that budget is used to evaluate performance and distribute resources (2010). Their study revealed that budgeting is no longer the sole effective management tool and many executives now call for the replacement of budgeting to update forecasts to easily adapt to the changing business environment (Gustafasson,, 2010).
As the children’s pastry and clothing shop is a start-up business, it is advisable to initially apply the budget system and eventually update the budget with forecasts after a few or about three months of operation. It is important to note that all updates including forecast should already start after the first month of operation. Below is the one year forecast for the start-up venture of Children’s Pastry and Clothing Shop.
A presentation in the CFA Institute stated that Working Capital Management is an important accounting strategy to help the business pay for its obligations on short-term investment and financing (2015). It noted that liquidity is the key on paying obligations and to achieve that, a manager and an accountant should convert the operational activity to cash. The cycle of cash conversion is collecting accounts receivable to pay suppliers, and then acquire inventory for credit. The inventory then will be sold for credit and then the business will then again collect the accounts receivables (CFA Institute, 2015).
The discussed cash conversion cycle appears to be risky. For a healthy business operation, the children’s pastry and clothing shop can apply different cash conversion cycle. We can agree that we can get supplies for credit but should be paid in a period where no interest rates will be incurred. After acquiring inventories on credit, we shall sell the inventories in cash and not in credit to eliminate the risk of profit loss, delayed payments, and interest rate expense. The shop will always demand for cash payments except in the case when the customer has only credit card payment as an option.
With the forecast costs and profit presented in the Table 2 and the position of the shop not to incur debts or receive orders from credit, we can expect a significant profit for the shop for the first year of operation. Below is the expected financial statement of the Children’s Pastry and Clothing Shop.

Children’s Pastry and Clothing Shop First Year forecast Financial Statement

We can conclude that in starting-up a business one should have an enough financial capacity to allocate resources based on financial business plans. The funds should be adequately allocated in the three aspects namely start-up expenses, start-up assets, and start-up financing. An accountant should prepare a cash flow statement indicating details on operating activities, investment activities, financing activities and supplemental information. Budgeting is an important financial management tool but should be eventually incorporated with updated financial forecasts to easily adapt in the changing business environment.
Liquidity is the key to pay obligations. As such working capital should be managed by obtaining inventory on credit and selling them in cash except in the cases where a customer has only credit card payment option. It is the discretion of the manager if he/she will obtain inventor in cash or credit. If inventory will be obtained in credit, he or she must assure that it will be paid promptly so credit will not incur interests.
The positive factors such as concrete financial plans, good financial management and marketing strategies, favourable regulatory environment in the Massachusetts, and quite a big population in the state, the venture on Children’s Pastry and Clothing Shop is feasible and can thrive for a long time. Massachusetts promotes the welfare of the children and such policy can have a positive impact in the business. The state is also a home for food and clothing industry and has a large number of consumers, a favourable business environment. We can conclude that the business can be profitable and thriving in such environment with the help of sound financial plan, good operational and customer management, and strategic marketing activities.


Enchanted Leraning. (2015). Massachusetts. Enchanted Learning. Available at
Government of Massachusetts. (2015). Government of Massachusetts. Available at
Government of Massachusetts. (2015). Business. Government of Massachusetts. Available at
Government of Massachusetts. (2015). Department Of Public Health, State Sanitary Code Chapter X – Minimum Sanitation Standards For Food Establishments. Government of Massachusetts. Available at
US Food and Drug Administration. (1999). Food Code 1999. US Food and Drug Administration. Available at
Berry, Tim. (2015). Estimating Realistic Startup Costs. Bplans. Available at
Loopnet. (2015). Massachusetts Retail Space. Loopnet. Available at
Kimball, Tarra. (2015). The Three Parts of a Cash Flow Statement. Small Business Chron. Available at
Desjardins. (2015). Budget management tool. Desjardins
Gustafasson, Maria, (2010). Budget- A Perfect Management Tool? University of Gothenberg. Available at
CFA Institute. (2015). Working Capital Management. CFA Institute. Available at

Cite this page
Choose cite format:
  • APA
  • MLA
  • Harvard
  • Vancouver
  • Chicago
  • ASA
  • IEEE
  • AMA
WePapers. (2021, February, 18) Sample Report On Financial Business Plan. Retrieved June 22, 2024, from
"Sample Report On Financial Business Plan." WePapers, 18 Feb. 2021, Accessed 22 June 2024.
WePapers. 2021. Sample Report On Financial Business Plan., viewed June 22 2024, <>
WePapers. Sample Report On Financial Business Plan. [Internet]. February 2021. [Accessed June 22, 2024]. Available from:
"Sample Report On Financial Business Plan." WePapers, Feb 18, 2021. Accessed June 22, 2024.
WePapers. 2021. "Sample Report On Financial Business Plan." Free Essay Examples - Retrieved June 22, 2024. (
"Sample Report On Financial Business Plan," Free Essay Examples -, 18-Feb-2021. [Online]. Available: [Accessed: 22-Jun-2024].
Sample Report On Financial Business Plan. Free Essay Examples - Published Feb 18, 2021. Accessed June 22, 2024.

Share with friends using:

Related Premium Essays
Contact us
Chat now