Business Plans

A business plan is a financial plan that is prepared before starting a business, entering a new sector, or expanding an existing business. In these and similar cases, it is necessary to assess the required investments, working capital needs, and projected cash flows. The plan also serves as a kind of budgetary framework for the planned investment.

Before preparing a business plan, we hold a meeting with the client at our office. During this preparatory meeting, we will learn about the business and all relevant details, including those necessary for preparing the plan, such as the type of business and the sector in which it operates, the nature of the services provided or the products manufactured, the composition of operating expenses and general administrative expenses, the business’s credit structure, including credit to customers and suppliers, cash flows, key employees in the organization, the business’s strengths and weaknesses, and more.

In parallel with the important information provided by the client, we will also seek additional and parallel data from various sources regarding the sector, activities, strengths, and weaknesses. Typically, business plans are prepared for one, three, or five years, depending on the client’s needs and the type of plan required, as follows:

Annual Business Plan This plan is usually suited for new businesses and is prepared on a monthly basis, mainly due to the need to build the business and delve into details in the short term. The goal is to assess feasibility, set targets, and monitor short-term performance.

The advantages of such a plan include reliance on actual data and/or future data that can be estimated based on contracts, business understandings, etc.

The main purpose of this annual business plan is to provide the most accurate possible forecast of expected cash flows, budgets, and credit needs derived from the investment and cash flow requirements.

Three-Year Business Plan This is an extended business plan for the next three years, taking into account actual data and forecasts based on them, as well as the business managers’ plans for the near future, such as adding manpower, hiring sales agents, investing in fixed assets, acquiring additional activities, mergers, etc.

This plan is mainly suited for existing businesses whose owners wish to assess feasibility and credit needs aligned with their short-term business plans.

The advantage of such a plan lies in its ability to reliably and reasonably predict future business performance in the near future, based on known actual data and typically available industry and economic data, alongside short-term forecasts based on management’s estimates and plans.

Five-Year Plan (Strategic Business Plan) This is an extended business plan, often considered a long-term strategic financial plan, as most of it focuses on the future, even on the distant future, rather than the present, and is therefore mainly based on forecasts and estimates, although naturally, they are based on actual data.

In essence, this plan represents the goals that the business’s management aspires to achieve, as due to the extended forecast period, most of the data is based solely on estimates. Sometimes, such a plan serves as the foundation for more detailed annual plans.

This plan is mainly suited for established businesses that wish to assess the impact of adopting a different strategic direction, the impact of increasing sales on profitability, setting sales targets for departments, evaluating the effect of product development on cash flow and profitability, or examining any process expected to last more than two years, including mergers, splits, and integrating businesses into other company operations.

At Michael Weitzman & Co. – Advisors and CPAs, we have extensive experience in preparing business plans for our clients and for occasional clients through specific appointments. The accountants at our firm are happy to hold a no-obligation consultation meeting, where the business’s needs will be assessed, and we will provide our recommendation for the most suitable business plan.

For more information available on our firm’s website, detailing the main topics recommended for consideration when preparing a business plan, please refer to the article published on the topic. For your convenience, here is the link to the article: Business Plan – Key Points to Consider.

An expert from our firm will be happy to assist you with this service. Feel free to contact us without obligation.