The capital plan is important for all types of value-added businesses but especially critical for capital intensive projects like processing and/or manufacturing ventures. It is important to include all capital needs.

Use the points below to help you prepare this section.

Capital Plans

• Project the capital cost of major facilities, equipment and peripheral facilities. Make a list of these items.
• Project the capital cost of working capital including inventories, etc.
• Project the capital cost for the marketing plan.
• Project the schedule of capital replacement needs for facilities and equipment.

Contingency Plans

Very few business plans unfold as expected. Delays, cost overruns, marketing glitches, price variations and personnel problems are only a few of the problems that can arise. Developing contingency plans in case the business plan does not go as expected can increase your odds of success. Financial reserves and skilled leadership and management are critical for creating and implementing contingency plans.

• Identify risk factors (from risk section).
• Identify and assess internal weaknesses of the business (project).
• Use sensitivity and what-if analysis to identify deficiencies.
• Develop and describe plans or alternative courses of action in case these weaknesses or deficiencies occur.
• Project the contingency capital needs for the business venture. This focuses on capital reserves needed if the business venture does not unfold as expected.