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can anyone share an example outline for a 3 year financial plan

Ron Rochester's Profile

I need to prepare a 3 year forecast. No problem with the quantitative side. I have a 3 year financial model, but need to prepare a write-up to be included in our business plan. I have no experience with this. any help is appreciated. Rr


Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

A write-up to the forecast is really very easy. At the base, you are stating why you feel the forecast is attainable. What was your thought process in generating the assumptions? Why do you think your assumptions are accurate? What would be required to outperform the forecast? What would negatively impact your forecast? Included in this write-up should be a reference to the external environment, including competitors. Numbers can be manipulated and made to look very good or very bad. Your write-up will either convince management that the forecast is attainable or that it is just “smoke and mirrors.”

As a first draft - Start by justifying every number on your income statement plan and document the dependencies. Next, describe what in the external environment will help your efforts and what will harm your efforts. If applicable, identify issues in your own processes that can negatively impact the plan.

Every subsequent draft will be a refinement of this base information.
Good luck.

Topic Expert
David Hughes
Title: Executive VP of Operations
Company: On Target Performance Group
(Executive VP of Operations, On Target Performance Group) |

I agree with Regis. The write up is all about justifying the numbers. You should include as much information as possible to validate the assumptions. You might want to break it into sections that follows the flow of your income statement (e.g. a revenue section, then operating expense section, etc). I would also include a section on "risks and opportunities" as well as something about your balance sheet and cash flow (too many people forget that working capital is a big part of your cash flow).

Tom Hartman
Title: VP Business Development
Company: Whitebirch Software
(VP Business Development, Whitebirch Software) |

Excellent advice so far. I've done the "risks and opportunities" that David H. recommends in the form of an "upside/" list which quantifies the magnitude of the risks and opportunities.

I also recommend you run sensitivity analysis on your drivers/variables and present the results. Finally, I recommend presenting the financials with each major project/initiative as a "layer" over the base financial case so the reviewers can clearly see the impact of each project.

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