The importance of the financial forecasts in the business planning process cannot be overstated.

The narrative explaining the products, the markets, the people and so on whilst important, will be worthless if the business cannot demonstrate viability in the future.

It is therefore imperative that financial forecasts are included with the business plan narrative.  It is also crucial that the financial forecasts are CREDIBLE.

7 common issues found with business plan financial forecasts include:
1. Incomplete financial forecasts. The Balance Sheet or even Cash Flow forecast is missing.
2. Past results of an existing business omitted from the financial forecast. Many forecasts overlook the fact that the actual Balance Sheet prior to Day 1 of the forecast period should be included in the financial forecast as the Forecast opening Balance Sheet position.
3. Balance Sheets that do not balance
4. Omission of key data
5. Overambitious sales and profit projections
6. Disconnects between the Business Plan narrative and the financial forecasts
7. Lack of understanding of the financial forecast by the business owner.