The Real Estate Encyclopedia
What is the Financial Section of the Business Plan?
Category - Professional Development - Become a Real Estate Agent
The financial statements are the backbone of your business plan. They show how profitable your business will be in the short and long term and should include the income statement, projecting such items as revenue, expenses, capital (in the form of depreciation) and capital goods. Ideally, you should generate a monthly income statement for the first year, quarterly statements for the second year and yearly statements for each year thereafter.

The cash flow statement details the amount of money coming into and going out of the business. Again, issue a monthly statement for the first year, quarterly statements for the second year and yearly statements for each year thereafter. Your cash flow statements will show your profit and loss for each period. These statements will show you also how your business fluctuates through the seasons. Real estate is a seasonal business, peeking during the spring and summer months and typically declining during the fall and winter. By determining your peaks and valleys, you will be able to better target your advertising dollars.

The balance sheet paints a picture of the business’ financial strength in terms of assets, liabilities and assets over a set period. You should generate a balance sheet for each year profiled in the development of your business.

When you create your business plan, consider it a living document and refer to it and update it often. A well-written plan will help you define activities and responsibilities within your business, as well as set and achieve your goals.


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Professional Development - Become a Real Estate Agent
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