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Business Plans: E Or L Visas

by Robert N. Reincke

This article will provide a brief overview of what points to keep in mind when counseling E or L clients with respect to the financial section of a standard business plan. Often the financial section of a business plan is the most daunting for your client, as it is for many entrepreneurs. This is completely understandable as the financial section is often the most comprehensive area of any business plan. It is actually in this section that all of the details of the written sections come together in dollar specific harmony or disharmony, whatever the case may be. It is in this section that the predictions, assumptions, evaluations, and mission of the entire business itself can be judged on whether or not these ideals make solid financial sense in the short and long term.

Specifically, it is in this section that anticipated future price and volume of products sold or services offered is compared with the cost of those services and the cost of administering those services or products as represented by a pro forma income statement. This section can also include any of the following spreadsheets:

  • Pro forma income statement(s): One to Five years
  • Start-Up Costs Calculation Spreadsheet
  • Key Ratio's
  • Cash Flow Analysis

The primary difference between financial statements for E and L visas is that L visa applicants, with a functioning company in their home country, should have historical costs and revenues that will be available to use as benchmarks for potential future financial assumptions. New start-up ventures, which are often the case in E visas, will have to make financial assumptions based upon other factors described later in this article.


If your client's company is intending to sell porcelain vases at a number of retail outlets starting in say Los Angeles, California, exactly how many units of each and at what price will the company have to sell in order for it to not only pay for the wholesale items themselves but the rent, utilities, phone bills, paper used in the office, computer program to monitor inventory, costs of rejected or damaged goods, and very importantly salaries of the owner and any new employees required to run the business, manage the customers purchases, and help customers?

A new business-owning client may, in the initial mission statement, determine that he/she wants to be the low priced high quality leader in her industry for rejuvenating skin lotion. She may also influence the rest of the business plan by indicating that her competitors are those other low priced or high quality leaders. The initial problem with these assumptions should actually be revealed here when the client comes to the conclusion that these same competitors prices for high quality items are often equally high, and low priced competitors items mostly correspond with normally compromised lower quality goods.

The client at this point may insist that she has special arrangements with foreign dealers say in Thailand that will supply what she knows as fact are high quality goods and calculating the shipping costs will be lower priced than what is on the market currently, therefore offering her a significant market niche. If this is the case, it is absolutely acceptable, and you may wish to council your client to mention this fact in the body of the text or footnotes to the financial spreadsheet. If this is not the case, the litmus test, so to speak, will be in the resulting bottom line figures of the pro forma income statement.

Pro Forma Income Statement

The financial section should always contain a pro forma income statement. A pro forma income statement is simply an evaluation of anticipated future revenue and expenses presented in a standard income statement format. Pro forma being a key word generally means forecasted information in either a monthly, quarterly, or annual format as far as five years into the future. These general categories include:

  • Sales or Revenue
  • Minus Cost of Goods or Services Sold
  • Equals Gross Income
  • Minus Sales and Marketing Costs (in some plans but not necessary)
  • Minus General & Administrative Expense (can include sales and marketing)
  • Equals Net Income Before Taxes

Your client's forecasted information should be based on more than just assumptions. It should be based on specific historical information, competitive financial information, industry information, and seasonality. If the company has any financial records, preferably for a one-year period (but even a quarter is better than none), these can be used as a starting point or as part of the mix to obtain information on what future financial possibilities may be. Obviously the historical information available for your L visa, and some E visa, clients will facilitate greater ease here.

More often than not in the case of E visas, historical information may not exist because of course, your client has just started their corporation, and since by definition they are not yet a visa holding alien resident, they will have not even begun to establish their retail outlet, service, or shop. In these cases most of the information will have to be calculated based on:

  • Competitive Information
  • Industry Information
  • Similar Companies the client has experience with in their home country
  • Similar Companies the client has experience with in the United States
  • Obtaining Information

Competitive information, the most difficult to obtain since most competitors don't readily offer their start up costs and detailed general and administrative expense documents to others, will be able to educate your client on costs and revenues that they may be able to expect in their own business.


If your client decides say he wants to start a shoe company and sell sandals at first a small boutique and then hopefully several boutiques in Atlanta, Georgia, but doesn't have any historical relevant information from his own shop about revenue and costs, he can try to get this information from:

  • Similar sandal selling shops
  • Shoe shops in general
  • General Merchandise Stores that may also sell shoes
  • Other importers that deal with similar material (for instance leather goods)
  • Published shoe industry information
  • Personal comparison (walking around and comparing pricing in other businesses)
  • Word of Mouth information from others in similar industries perhaps in your client's home country

Larger shoe retailers may have annual reports that indicate this information also. While the non-immigrant alien will not have the volume or the expenses remotely similar to this large company, he may gain insight at least to the categories of expenses and the relative ratio's of such items as for instance, the most important gross margin (the cost of goods sold as a percentage of the revenue received from sales).

If he is very lucky, he will be able to ask another small retailer who is willing to share this information perhaps because the retailer is empathetic to his challenges. This gold mine of information would shed light on unexpected costs such as how much it really may have cost to successfully start up and gain recognition, because perhaps the competitor may shed light upon a fact such as he needed to donate a large amount of shoes to popular socialites and celebrities about town to gain visual recognition and publicity in his local community.

Industry Information

Much more general information for the industry as a whole is much easier to obtain and available through a number of sources via financial and governmental institutions that maintain industry records normally categorized through standardized SIC codes. This kind of information will take all sized manufacturers, service providers, wholesalers, or retailers into account and provide standard revenue information. While this is obviously less ideal, it is still very important.


If taking into consideration all ice cream manufacturers in the country, one learns that income is on average $1.5 million per year, you may be able to council your client that he may be able to make an assumption that, if successful, some time in the future, his/her revenue may possibly be anticipated to be around that average. The financial statement can be oriented towards that objective if the path to that objective is clearly defined in the plan itself and in earlier cost and price decisions.


Each company in reality has slightly different expenses, which should be pointed out in the pro forma income statement. Yes, most have utilities, office expense, and insurance, and all should include salaries and rent. However, depending on the nature of the business, other items should also be included.


If the potential immigrant business owner is say a massage therapist, line items should exist for the future potential purchase of oils, lotions, significant cleaning of sheets or towels, and perhaps even expenses for future purchase of portable massage chairs when the business expands. This would be represented in the General and Administrative expense section and be indicated as an increase during the month or quarter in which inventories of these ancillary utilized items will be required.

A client opening a chain of silk flower shops obviously would not have such expenses. They may have other expense items such as damaged goods, if say they purchase a lot of inventory and a percentage of these are torn or somehow damaged. The massage therapist would not have a significant expense in damaged goods and therefore her financial forecasts would not necessarily have to include this line item.

Overall the financial pro forma income statement tells as much a story about the business as the written plan. If the plan itself is written well, the assumptions in the pro forma income statement will be clear. If in the body of the plan, the business plan writer indicates that a cashier will be needed in the third month of business, it should be clear in the pro forma income statement that salary expense is increased in the first quarter of business.

Start Up Costs

Financial statements can be detailed to the point of saturation by the immigration official reading your client's spreadsheet, or as brief as necessary to further emphasize points made earlier in the written plan. A Start-Up Costs spreadsheet is required, in this business plan writers experience, if the company is newly forming and has a variety of clearly defining costs, or if the company is investing significantly in a a new location, manufacturing facility, or retail store.

Start-Up costs basically define for the reader how initial monies have to be spent on categories such as:

  • Initial rent
  • Deposits
  • Licenses
  • Tools and equipment
  • Start-up inventory

Where a client's company, for instance, is purchasing another, lock, stock, and barrel, this can be indicated in the written plan and may or may not need to be further expressed in a separate spreadsheet.

Other Financials

Other relevant financial statements can be meaningful to a good plan, but often times, a plan can get out of kilter with too many spreadsheets and financial iterations and calculations that begin to weigh down its overall effectiveness and clarity. Should it be critical to the overall comprehension of the business plan, however, other financials should definitely be included.

For instance, cash flow analysis might be helpful if due to seasonality it's clear in the pro forma income statement that the company is expected to take a large dip in revenue and begin to make a loss. To explain how the company intends to financially support itself during that loss one could choose to either clarify this in the written section of the plan, allocate additional savings or investment in the start-up section of the financials, or create a cash flow analysis that proves the company will maintain a positive cash flow during the anticipated downturn should this be the case.

Of course, this may not be the case, and in fact it may not be until the financial section of the plan is created that the potential visa seeking immigrant realizes he or she has a problem with a consistently negative bottom line (please note that often times a loss in the first year of business is acceptable if the business is newly formed). This can be remedied by:

Investing more capital during the phase of the business in which the loss is most profound if this investment is explainable as a cost directly related to increasing business in future quarters or seasons (obviously the business must be self sustaining and profitable in the long term)
Reducing Direct Costs associated with products or services (Costs of Goods Sold)
Reducing General and Administrative overhead
Increasing Revenues either by units sold, accounts serviced, or price of product offered (if this is sustainable and reasonable)

It is here, once again, that the assumptions made in the written section of the plan are found to be realistic or not.

Key ratios are well utilized if your client wishes to make a point out of profitability figures or good cost management measures taken that will put him in a better light. While it is important that he develop specific price matrix graphs or ratio calculations for her own use, often this amount of detail isn't necessarily fully appreciated by many outside the financial professions. The uniqueness of the situation should define what is included or excluded, but in many plans, well-established supporting information should be used concisely.

About The Author

Robert Reincke is a business plan writer (MBA) located in Los Angeles California. He can be reached at

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.