Business plan as a useful test before entering the market

It often happens that an entrepreneur enters the market even before he thinks carefully about who his future customers and competitors are. The business plan therefore represents an important safeguard that, so to speak, forces the entrepreneur to answer the above questions. It is better to do this sooner than later, as mistakes are easier to correct on paper than directly on the market.

Second mistake an entrepreneur can make is not to make at least a basic calculation of the income and expenses of his future business. Even a simple calculation in Excel can show us whether an entrepreneur will cover costs and make a profit over the next months and years, or whether there will be problems in certain months. As a future entrepreneur once said: “If Excel doesn’t work, then it won’t.”

However, it is not only income and expenses that are important, but also cash flow. This tells us whether the entrepreneur will have enough money to cover running costs or not. Revenues differ from cash flow in that they are recorded when the invoice is issued but not yet paid. However, current costs can only be covered by revenues that have already been paid. This is why planning an entrepreneur’s cash flow is so important.

You can make a simple income and expenditure plan as well as cash flow yourself if you master at least the basic level of Excel. You can also use one of the free programs. An example of a program that, in addition to the revenue and expenditure plan and other financial indicators, also takes into account the cash flow plan, can be found on the website of the Slovenian Enterprise Fund:

Business plan preparation tool (in Slovenian)