What type of forecast is included in the 'Costings and Finance' section of a business plan?

In the context of a business plan, the 'Costings and Finance' section is critical for understanding the financial health and sustainability of the business. A cash flow forecast is particularly important as it predicts the inflows and outflows of cash over a specific period. This allows businesses to plan for expenses, manage their finances effectively, and ensure they can meet their obligations.

The cash flow forecast helps identify periods of surplus or deficit, which is crucial for making informed financial decisions. It enables businesses to anticipate funding needs and manage working capital, ensuring they maintain enough liquidity to operate smoothly. By monitoring cash flow closely, a business can respond to changes in revenue and costs, thereby promoting financial stability.

While sales, production, and market forecasts provide valuable insights into potential revenue, operational needs, and market conditions, they do not directly address the management of cash resources, which is why the cash flow forecast is specifically included in the 'Costings and Finance' section of a business plan. An effective cash flow forecast ensures the long-term viability of the business by helping manage daily operations and making strategic decisions based on available cash resources.