Posted by: bevmeldrum | October 30, 2007

Common Questions About Business Plans – How Do I Get The Numbers Right?

Do not try to do it yourself. For those of you used to setting up your own spreadsheets unless you are a mathematical genius do not try to set up a spreadsheet manually – there is a real danger that you will miss something along the way and as it will probably be a formulae that is incorrect it will take a long time to find.

At The Tool Factory between us we have an A level in Mathematics and a degree in IT and still couldn’t get our balance sheet to balance using a spreadsheet we designed ourselves (this was in the days before Business Plan Writer).

If you can, use a pre-designed spreadsheet or software that will guide you through the process of entering your financial information in and that will then produce your financial reports for you.

For all those are not so familiar with spreadsheets, the advice is the same – let someone else do the hard work of setting up the formulae and working out the mathematics behind it all. Use a template.

For those of you that want to learn where each figure goes on a balance sheet, or how depreciation is calculated, then this is a great opportunity to see how these figures relate to your organisation.

For everyone else, the things you will want to focus on and how much you will charge for services and what different things will cost – you are less interested in how it all comes together in the financial reports.

This is why templates, and in particular software programmes, are so useful – you put in the figures you know and the software creates the reports. The software programmes that are particularly good are those that let you flick back and forth between the figures you have entered and the financial reports. When you can move easily between the two screens it means that if you don’t like the look of your profits for the year, you can go back and change your figures – increase how much you will charge, for example. You can then switch back to your financial reports and immediately see how changing the figures has affected your profit for the year, for example.

Have a look at the Business Plan Writer video to see an example of this.

Once you have filled in all of your financial information, ask an accountant or someone who understands inancial reports to have a look at it. They will be the ones that will be able to spot when your balance sheet doesn’t balance or when your expenses are too low. It is much better to get someone else to point these hings out to you before you send your Business Plan off to a funder or a bank, rather than them sending it back to you with such an obvious mistake highlighted.

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