Financial planning means that you create a budget for your business before starting up. In the budget, you estimate how much money the business will need, and can determine its feasibility, and how much profit will make after calculating the expected sales.
Following is an example of a simple budget for juice shop to calculate the initial expenses of this business.
Sample Budget for One Month (Appendix 7)
INCOME: AMOUNT TOTAL
Fruit juice deliveries 60 canisters ($8 each) $480.00
Fruit juice retail sale 60 canisters ($12 each) $720.00
TOTAL INCOME: $1,200
EXPENSE:
Buy mangos 200 pieces ($0.50 each) $100.00
Buy bananas 500 pieces ($0.20 each) $100.00
Buy pineapples 100 pieces ($1.00 each) $100.00
Pay salaries to 2 workers ($120 each) $240.00
Pay delivery transport 20 times ($5 each) $100.00
Business mobile phone credit $20.00
Rent for plant & shop building $100.00
Electricity $60.00
TOTAL EXPENSE: $820.00
PROFIT/ LOSS: $380.00