Undiscounted Cash Flows
Where a business plan is used to seek equity funding from private equity investors or venture capitalists, care must be taken to develop a sound financial plan. Sometimes, companies seek the help of business consultants to assist in this process, especially for complex businesses.
Cash flow projections are vital to entrepreneurs. Cash flow projections allow entrepreneurs to keep an eye on the cash flow of the business to anticipate and cater to the needs of the startup today, tomorrow and five years down the road.
A company's profit figures may be on the uptrend, but until the entrepreneur looks at free cash flow, one may not know if the company has really generated cash in a given year or not. Free cash flows represent real cash whilst net profits are masked by accounting data.