Financial Operating Plan - FOP
Categories: Company Management, Accounting
A financial operating plan, or FOP, includes all of the ins-and-outs of revenues and costs over a specific time period for running a business or organization.
A well-rounded financial operating plan will include a cash flow projection, a budget, sales projections, and payroll costs at minimum. FOPs use the past to help project the future, combining historical revenues and costs with expected changes and trends.
Financial operating plans that are kept up-to-date can be used by management as a tool for...well...managing things for a business. By sticking to the plan (the budget) and keeping an eye on actual cash flow compared to projected cash flow, a FOP can be the ultimate business plan.
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Finance: What is a Business Plan?6 Views
Finance allah shmoop what is a business plan Well think
of it like blueprints for building a home or a
directions for toll house cookie baking or the process for
howto you know get pregnant let's get down to business
time anyway A business plan is just the game day
strategy for how your little garage startup will grow to
someday be a google or facebook or even little old
shop You'll describe the product like a pill that cures
cancer Yep some products are easy to describe Like if
you actually had a pill that cures cancer while you'd
pretty much be done you could have a one page
business plan that just says i have a pill that
cures cancer Your eight hundred seventy six people on whom
it has worked Now give me billions of dollars and
a nobel prize night and you'd be done But if
you only had a flying car well then you describe
it well How much weight it khun carrie how fast
and far it goes how it navigates and avoids crashes
and how it recharges and stuff like that That's the
product then there's the place or distribution Like how you
get the car out to the masses you want to
sell it to like are you partnering and paying ford
to stock it in their showrooms Are you leveraging starbucks
places teo You know showcase it Get buzzed while you
buzz about that Or do you just have a mail
order website Customers pay with a credit card and a
delivery agent applies it to your home You know kind
of like tesla All right Next up promotion Like how
do you market your product Or is it just so
cool that the press writes about it endlessly fawning and
all that digital ink is free Well if the products
all over the covers of the new york times and
yusa today well you're kind of marketed everyone in the
country knows about it All right Well then there are
the finances Like how much does a unit cost So
this is all about price How much is the factory
that stamps out the carriage The blades of the battery
Well if you sell a hundred units a month you
make what What should they be Priced at fifty grand
Each one hundred two hundred fifty grand if you sell
Ten thousand a month Well how much do you make
How much capital do you need thio field all that
get through your first two years and then how much
do you need to raise beyond those first two years
to get to break even profitability and and so on
Is there a ny po in the future Yeah yeah
what about that That should be in the plan Well
there's a lot to figure out a lot of work
to put together a business plan So you better get 00:02:27.7 --> [endTime] uh you know busy No