Month: November 2020

You may be wondering what the difference is between a business plan and a budget. It is actually very simple.

First, let’s see what the budget and the business plan have in common.

Common Points Between Budget And Business Plan

There are two things in common between a business plan and a budget.

The first common point is that both are the result of a reflection on the future of the company.

The second point in common is that both include a financial forecast developed by the management of the company. For the budget as for the business plan, the financial forecast constitutes an objective taken by the management towards the financial partners of the company (banks and investors).

Now let’s see what the differences are.

Differences Between Budget And Business Plan

There are three basic differences between a budget and a business plan: scope, time horizon, and level of detail.

The scope

The budget is limited to the financial forecast while the business plan includes a reflection on the market, the organization, and the strategy of the company for the years to come. The scope of the business plan is therefore much broader than that of the budget.

The time horizon

The time horizon of the two documents is also very different: the budget is a short-term financial forecast, usually over 12 months, while the business plan contains a medium-long-term financial forecast, usually over 3 or 5 years.

The level of detail

The last difference between the two documents is the level of detail.

The budget is very detailed, each planned expense is listed in detail. The business plan is much more vague: it focuses on the broad masses.

This is partly explained by the difference in time horizon between the two documents.

Indeed, with the exception of new companies, the visibility on the future of the company at 12 months is generally quite good: the management can use the results of the previous year as a starting point and simply add the effects of inflation and the commercial action plan planned for the new year.

The visibility on the future of the company in 3 or 5 years is on the other hand much more vague. Market demand can change, competitors can change their commercial positioning, regulation can change, etc. In this context, it is impossible to predict with precision what will be the financial performance of the company.

This is why the financial forecast of the business plan generally consists of the budget for the next year and an extrapolation of the trend over the coming years.

There you go, now you know the difference between a business plan and a budget.

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The software does a lot of things for you, but it doesn’t do everything. Also, not all business plan software is created equal, so you have to be careful about choosing the right one.

To guide you, here is a list of things to check when evaluating business plan software:

Financial forecast:

Does the software’s financial forecast meet the expectations of banks and investors?

If the software does not allow you to make a 3-year forecast, you run the risk of seeing your plan refused by your bank.

Text part:

A business plan contains a financial forecast, but it is not limited to this one.

The textual part that accompanies the financial forecast is just as important (if not more) because this is where you will detail the business opportunity, explain your action plan, and highlight the team that will execute. the plan.

A good business plan software should therefore offer a decent text editor.

But that’s not enough, it should also offer you clear instructions and examples to guide you in writing your plan.

Final render:

Almost most importantly, the document generated by the software should look professional. The presentation should be clear and airy. Rendering of tables and graphics of good quality. And the document must be in PDF format because this way you can be sure that the recipient of your plan will be able to open the document.

Security :

Finally, if it is an online business plan software it must be secured using an SSL certificate. Otherwise you run the risk of your data being stolen (and possibly ending up in the hands of your competitors).

How do you know if online software is safe? Very simple, when you are connected to the software, the bar of your browser should be green as in the image below.

This means both that the connection is secure but also that the identity of the site has been verified by the certificate issuer.

Online Or Download Business Plan Software?

Up to you. However, online software has several advantages:

• • They are generally more recent: the Web has many advantages for software publishers and they tend to migrate on the web
  • Some, like ours, are Mac and tablet compatible: there is little chance that you will find business plan software to download that is compatible with a Mac or a tablet.

• They do not require installation and are accessible from anywhere: from your home, office, etc.

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