Investment plan 

Good planning in the entrepreneurial phase of a business can make the difference between the success or failure of the project. Whoever is behind the idea must ensure they have sufficient resources for it and can cope with possible accessory economic needs. An investing plan is best for this.It’s an example. It establishes investment goals and firm startup costs.

However, throughout the life cycle of a project, it is usually necessary to develop new investment plans when it comes time to make financial decisions. This implies that along with the initial investment plan, there are also:

  • Replacement investment plan: when it is necessary to exchange an asset of the company for another to replace it.
  • Rationalization is an investment plan that involves adjusting income and expenses through an investment that involves cost savings.
  • Expansion investment plan: for the business to continue growing, it is necessary to invest in new assets.

Initial investment plan

It is perhaps the most complicated to elaborate on since it is common for the entrepreneur not to have exact data on what he will have to spend. It is, therefore, about making an estimate of short- and medium-term expenses that is as realistic as possible. This plan normally comprises investments (premises, machinery, etc.) and current expenses (taxes, supplies, suppliers, etc.) in the first months of operation.

The valued inventory

Within the initial investment plan, a valued inventory must be prepared. This implies that each expense must be budgeted as well as possible. The more detailed that valued inventory is, the better the entrepreneur will know how much to spend.If you also combine this information with the information derived from the sales plan, you will know whether your idea is really profitable. 

Content of the investment plan

This document must detail all the expenses necessary to start a business. The interested party can format the document anyway they like, but it must be correctly arranged. An example could be:

  • Expenses related to the formal creation of the company or registration as a freelancer
  • Expenses related to investments in non-current assets
  • Expenses related to investments in current assets
  • Expenses associated with the return of the financing (debt contracted)

Establishing the different investment requirements separately can help us see better what each item of money will be spent on and, if possible, the savings in some of them.  By adding the different items, you get the specific figure needed to start the business.

The investment plan in the economic and financial plan

To make better decisions, entrepreneurial projects must be planned and documented.The investment plan is only one of the parts that make up the economic-financial plan, which in turn is part of the business plan. The investment plan lets you quickly know how much money to spend, while the economic-financial plan determines how financing needs will be covered. 

At a private level

Examining savings options might also use the investment strategy.This optimizes investments.The investor’s profile may alter depending on his age.

You must also consider your current financial situation and how much money you can invest. In this sense, determining risk tolerance and setting a budget is critical. The plan needs investment goals and a timeframe.This makes comparing investment options and choosing the best one easier. An investment plan is necessary to secure a return on investment, whether personal or professional.

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