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Basically, consumers are hunkering down to limit spending, save money, conserve resources, and change the way they've been living. The major influence on the health of an economy is the psychological state of its consumers. When there exists a broad belief that spending beyond necessity is unwise, people will change their habits and as a result, some businesses will have to close their doors. The economy is molting into a new, leaner animal. Rather than react in desperation to avoid doom, firms should interact with the current situation with innovative and forward thinking actions.

Projected Financial Statements: These statements are usually helpful, but not necessary. You will develop and describe your strategies for the business throughout your Business Plan. In the financial section, you will need to estimate the financial impact of those strategies by developing projected Income Statements, Balance Sheets, and Cash Flow Statements.

I mentioned that the 'writing of a business plan' as one of the pivotal steps involved in setting up a successful business. By now you should understand the need for writing a business plan. Writing a business plan, for a traditional brick and mortar business, will probably take a lot of time. It may take up to 100 hours or even more. For obvious reasons, a new business needs to carry out a lot of research before a business plan can even be developed.

The financial statements section should show the way things are now if you have an existing business, as well as a forward look at your checking account, or projected income statement. The only way a start_up company can provide an income statement and balance sheet is by projecting these figures based upon well defined assumptions. Both start_ups and existing businesses should include a statement of owner's equity.

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