Indispensable when starting a business, the financing plan establishes the list of expenses and resources of the company at the time of its launch. Whatever the method of financing for which the entrepreneur opts, the latter must present this document to its potential financiers (banks, individuals through crowdfunding, etc.). What is a financing plan? How to build it? What is his goal ? What is the difference between initial and projected financing plan? So many questions that we answer through this article.
A financing plan is a provisional document in the form of a table. It lists all the financing needs of a company and the resources to finance these needs. It should be noted that companies with more than 300 employees have the legal obligation to carry out a financing plan. The same is true for companies with sales of more than 18 million euros. Although the financing plan is mandatory for large companies, it is the companies that are being created that are most needed. In this case, it is called the initial financing plan. This is the document that will be of particular interest to us throughout this article.
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The initial financing plan is composed of two elements:
Allowing you to know the expenses necessary to launch a new company and the resources that will be allocated to it, the financing plan is an essential document for the definition of its business plan. In addition, it allows investors to have answers to several questions:
All of these elements will make it possible to answer the big question that a bank or a potential investor asks himself: is the project viable? Indeed, if business creation seems risky or if, for example, needs are greater than resources, everything will suggest that it is better not to invest. In the event that the business start-up project is viable, the funder will be interested in the elements present in the financing plan in order to determine its own contribution. We will come back to these details later.
The initial financing plan, like the financing plan , is essential when starting a business. Indeed, these two documents will make it possible to determine the viability of a project . Like the initial financing plan, the forecast consists of resources and needs. However, this last document will focus on it for a longer period, usually three years .
The provisional financing plan will include the elements of the initial financing plan, but will reveal several additional data:
Although it is particularly speculative, the forecast financing plan is also an interesting indicator. Indeed, it allows to define a little more precisely the viability of a project . In the event that it shows unbalanced financing for example, it would be clear that the creation of a business must be rethought. It can also be useful to gauge the business plan chosen by the entrepreneur. The financing plan could indicate in particular whether the project is too ambitious in the long term and therefore if it is necessary to rework it. Admittedly, the initial financing plan might suggest that the project is viable for one year. However, with the projected financing plan, it is possible to demonstrate if this is the case at three years.
Be careful not to confuse the financing plan and the financing table! The latter term refers to the cash flows of resources released and needs mobilized in a year. By analyzing the variations of these two flows, it is possible to anticipate the evolution of the company and thus to undertake new investments accordingly.
Find two examples of purely fictitious financing plans:
|1. Start up costs||45,000||1. Capital contribution of the founder||59,000|
|2. Intangible assets||0||2. External capital contribution||45,000|
|3. Tangible fixed assets||39,000||3. Honorary loan||0|
|4. Financial fixed assets||9,000||4. Ready to start a business||7,000|
|5. Stocks||31,000||5. Grant||2,000|
|6. Cash||5,000||6. Loan||16,000|
NEEDS129 000 €TOTAL
RESOURCES129 000 €
|Variation of the WCR||50,000||21,000||12,000|
|Repayment of loans||0||0||0|
|Increase in capital||30,000||0||0|
|GAP (Resources – Needs)||2,000||– 6,000||8,000|
As we have seen, the financing plan is a particularly useful indicator to convince a financier to invest in his business creation project. To achieve this, it is important to keep several tips in mind:
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Before embarking on a business start-up and therefore in developing a financing plan, it is also important to know the practices of banks and potential investors. In order to reduce their risk taking, the funders: