Good Business Plan About Real Estate

Assumptions of the Financial Plan

A financial plan is the most important part of a business plan, in which the forecasting of revenues, income statement, balance sheet and cash flow will be included to inform that the business will create economic values in the future. A business plan without a perfect financial plan is not at all accepted, and it is unable to attract the attention of the investors towards their project. The assumptions have been distributed into two different units known as Residential Units and Rental units because the financial plan is a plan of a Real Estate Business Plan.

Following are the number of Residential and Rental projects to be completed in a year from Year 1-5

There is 20% increase in Number of contract
Following are the Payment per Residential and Rental projects per contract from Year 1-5
There is 5% Increase in Payment per contract for both residential and rental
The Cost of Services rendered is assumed to be 70%
Following are the First year operating expenses in which there is 10% increase each year
There is 10% depreciation rate on fixed assets
The Depreciation method is straight line
There is 25% of social contribution from the 90% of the one partner's income share
The tax rate is 30%
Following are the assets purchased at the start of the business
The owners have invested $ 150,000 at the start of the business
Start-Ups
This section of the report will analyze the start up cost of the company that includes numerous things particularly. Office Equipment, Computers, Tools and other important Property Plant and Equipment (PPE) are some of the major things that should have been counted and pointed out in the startup expense of the business. It is important for an organization to keep the level of their start up expenses to a low level in order to have a high bottom line of the respective company. The startup expense that will be incurred during the operations of five years of the company is as follows

Revenue Recognition

Every organization strives and thrives hard for the economic prosperity and increasing revenue with positive attitude. It is more than important for the organizations to recognize their revenue in a perfect and organized manner. In this particular part the revenue recognition for the next three years is recorded and reported accordingly to gain an understanding that the company is able to generate sufficient amount of cash from their on-going operations to become effective and interactive at the same time. High amount of recognize revenue can be extremely essential and effective for the organizations, and it is equally beneficial for this real estate business as well. The recognized revenue of the company from year 1 to year 3 is as follows

Income Statement

Income statement is known as the first element found in the annual report of an organization. Income statement is basically a summary of total amount of revenue, gross profit and net income generated by the company in a given financial year. According to International Accounting Standard (IAS-1), an income statement should have the recognized revenue and he operating expenses to gain an understanding of the revenue and net income generation in a given financial year. The income statement in this financial plan has been divided into two different parts like one year income statement and five year income statement. The income statements of one and five years is as follows

Balance Sheet

Balance Sheet is the 2nd most important item that comes under the ambit of an Annual or Financial Report. A balance sheet is a document from which the financial position of an organization can be easily gauge or measured. It is usually based upon the total assets, liabilities and equities, and it is a powerful medium of information for the individuals who would like to analyze the financial position of an organization. According to the rules of Financial Management, total assets of an organization should be equal to the amount of liabilities plus shareholder’s equity or capital. Any amount that breaches the limit should not be a part of the balance sheet. The computed Balance Sheet for one and five years of the company is as follows

Cash Flow

Cash flow is the third most important element found in a financial statement. Theoretically, a cash flow is a document from which the cash inflows and outflows of a company in a given financial year can be analyzed accordingly. Cash usually bifurcated into three different levels known as cash flow from the operating activities, cash flow from the investment activities and cash flow from the financing activities. In the end of a cash flow statement, there is an amount named as current account balance that is used to analyze the positivity and negativity of the cash flow of a company. The cash flow of one and five years of the company is as follows