Financial planning is generally expected to include the following:

(1) assumptions about the conditions of the business plan;

(2) projected balance sheet; projected profit and loss statement; cash receipts and disbursements analysis; and sources and uses of funds.

It can be said that a business plan outlines what the venture entrepreneur needs to do in the fundraising process, while a financial plan supports and illustrates the business plan. Therefore, a good financial plan is critical in assessing the amount of capital the venture needs and increasing the likelihood that the venture will obtain funding. If the financial planning is not well prepared, it will give investors the impression that the business managers are inexperienced, reduce the assessment value of the venture enterprise, and also increase the business risk of the enterprise, so how to develop a good financial planning? This depends first of all on the vision of the venture business? Is to create a new product for a new market, or to enter an existing market with more financial information.

A venture looking at a new technology or innovative product is unlikely to be able to refer to existing market data, prices and marketing methods. So it has to make its own projections about the growth rate and likely net profitability of the market it is entering, and sell its vision, management team and financial model to investors. In contrast, a venture that is preparing to enter an existing market can easily illustrate the size of the overall market and how it can be improved. Venture firms can plan for the size of their first year of sales based on the information they have about their target market.

The financial planning of the venture should ensure that it is consistent with the assumptions of the business plan. In fact, financial planning is inextricably linked to the production plan, human resource plan and marketing plan of the business.

To accomplish financial planning, the following questions must be clarified:

(1) How much of the product will be issued in each period?

(2) When will product line expansion begin?

(3) What is the production cost per product?

(4) What is the pricing for each product?

(5) What distribution channel will be used and what are the expected costs and profits?

(6) What types of people need to be employed?

(7) When does the hiring begin and what is the budget for salaries? And so on.