sample of business plan financial projections

• Business Planning

Business Plan Financial Projections

Written by Dave Lavinsky

Financial projections are forecasted analyses of your business’ future that include income statements, balance sheets and cash flow statements. We have found them to be an crucial part of your business plan for the following reasons:

• They can help prove or disprove the viability of your business idea. For example, if your initial projections show your company will never make a sizable profit, your venture might not be feasible. Or, in such a case, you might figure out ways to raise prices, enter new markets, or streamline operations to make it profitable. 
• Financial projections give investors and lenders an idea of how well your business is likely to do in the future. They can give lenders the confidence that you’ll be able to comfortably repay their loan with interest. And for equity investors, your projections can give them faith that you’ll earn them a solid return on investment. In both cases, your projections can help you secure the funding you need to launch or grow your business.
• Financial projections help you track your progress over time and ensure your business is on track to meet its goals. For example, if your financial projections show you should generate $500,000 in sales during the year, but you are not on track to accomplish that, you’ll know you need to take corrective action to achieve your goal.

Below you’ll learn more about the key components of financial projections and how to complete and include them in your business plan.

What Are Business Plan Financial Projections?

Financial projections are an estimate of your company’s future financial performance through financial forecasting. They are typically used by businesses to secure funding, but can also be useful for internal decision-making and planning purposes. There are three main financial statements that you will need to include in your business plan financial projections:

1. Income Statement Projection

The income statement projection is a forecast of your company’s future revenues and expenses. It should include line items for each type of income and expense, as well as a total at the end.

There are a few key items you will need to include in your projection:

• Revenue: Your revenue projection should break down your expected sales by product or service, as well as by month. It is important to be realistic in your projections, so make sure to account for any seasonal variations in your business.
• Expenses: Your expense projection should include a breakdown of your expected costs by category, such as marketing, salaries, and rent. Again, it is important to be realistic in your estimates.
• Net Income: The net income projection is the difference between your revenue and expenses. This number tells you how much profit your company is expected to make.

Sample Income Statement

2. Cash Flow Statement & Projection

The cash flow statement and projection are a forecast of your company’s future cash inflows and outflows. It is important to include a cash flow projection in your business plan, as it will give investors and lenders an idea of your company’s ability to generate cash.

There are a few key items you will need to include in your cash flow projection:

• The cash flow statement shows a breakdown of your expected cash inflows and outflows by month. It is important to be realistic in your projections, so make sure to account for any seasonal variations in your business.
• Cash inflows should include items such as sales revenue, interest income, and capital gains. Cash outflows should include items such as salaries, rent, and marketing expenses.
• It is important to track your company’s cash flow over time to ensure that it is healthy. A healthy cash flow is necessary for a successful business.

Sample Cash Flow Statements

3. Balance Sheet Projection

The balance sheet projection is a forecast of your company’s future financial position. It should include line items for each type of asset and liability, as well as a total at the end.

A projection should include a breakdown of your company’s assets and liabilities by category. It is important to be realistic in your projections, so make sure to account for any seasonal variations in your business.

It is important to track your company’s financial position over time to ensure that it is healthy. A healthy balance is necessary for a successful business.

Sample Balance Sheet

How to Create Financial Projections

Creating financial projections for your business plan can be a daunting task, but it’s important to put together accurate and realistic financial projections in order to give your business the best chance for success.  

Cost Assumptions

When you create financial projections, it is important to be realistic about the costs your business will incur, using historical financial data can help with this. You will need to make assumptions about the cost of goods sold, operational costs, and capital expenditures.

It is important to track your company’s expenses over time to ensure that it is staying within its budget. A healthy bottom line is necessary for a successful business.

Capital Expenditures, Funding, Tax, and Balance Sheet Items

You will also need to make assumptions about capital expenditures, funding, tax, and balance sheet items. These assumptions will help you to create a realistic financial picture of your business.

Capital Expenditures

When projecting your company’s capital expenditures, you will need to make a number of assumptions about the type of equipment or property your business will purchase. You will also need to estimate the cost of the purchase.

When projecting your company’s funding needs, you will need to make a number of assumptions about where the money will come from. This might include assumptions about bank loans, venture capital, or angel investors.

When projecting your company’s tax liability, you will need to make a number of assumptions about the tax rates that will apply to your business. You will also need to estimate the amount of taxes your company will owe.

Balance Sheet Items

When projecting your company’s balance, you will need to make a number of assumptions about the type and amount of debt your business will have. You will also need to estimate the value of your company’s assets and liabilities.

Financial Projection Scenarios

Write two financial scenarios when creating your financial projections, a best-case scenario, and a worst-case scenario. Use your list of assumptions to come up with realistic numbers for each scenario.

Presuming that you have already generated a list of assumptions, the creation of best and worst-case scenarios should be relatively simple. For each assumption, generate a high and low estimate. For example, if you are assuming that your company will have $100,000 in revenue, your high estimate might be $120,000 and your low estimate might be $80,000.

Once you have generated high and low estimates for all of your assumptions, you can create two scenarios: a best case scenario and a worst-case scenario. Simply plug the high estimates into your financial projections for the best-case scenario and the low estimates into your financial projections for the worst-case scenario.

Conduct a Ratio Analysis

A ratio analysis is a useful tool that can be used to evaluate a company’s financial health. Ratios can be used to compare a company’s performance to its industry average or to its own historical performance.

There are a number of different ratios that can be used in ratio analysis. Some of the more popular ones include the following:

• Gross margin ratio
• Operating margin ratio
• Return on assets (ROA)
• Return on equity (ROE)

To conduct a ratio analysis, you will need financial statements for your company and for its competitors. You will also need industry average ratios. These can be found in industry reports or on financial websites.

Once you have the necessary information, you can calculate the ratios for your company and compare them to the industry averages or to your own historical performance. If your company’s ratios are significantly different from the industry averages, it might be indicative of a problem.

Be Realistic

When creating your financial projections, it is important to be realistic. Your projections should be based on your list of assumptions and should reflect your best estimate of what your company’s future financial performance will be. This includes projected operating income, a projected income statement, and a profit and loss statement.

Your goal should be to create a realistic set of financial projections that can be used to guide your company’s future decision-making.

Sales Forecast

One of the most important aspects of your financial projections is your sales forecast. Your sales forecast should be based on your list of assumptions and should reflect your best estimate of what your company’s future sales will be.

Your sales forecast should be realistic and achievable. Do not try to “game” the system by creating an overly optimistic or pessimistic forecast. Your goal should be to create a realistic sales forecast that can be used to guide your company’s future decision-making.

Creating a sales forecast is not an exact science, but there are a number of methods that can be used to generate realistic estimates. Some common methods include market analysis, competitor analysis, and customer surveys.

Create Multi-Year Financial Projections

When creating financial projections, it is important to generate projections for multiple years. This will give you a better sense of how your company’s financial performance is likely to change over time.

It is also important to remember that your financial projections are just that: projections. They are based on a number of assumptions and are not guaranteed to be accurate. As such, you should review and update your projections on a regular basis to ensure that they remain relevant.

Creating financial projections is an important part of any business plan. However, it’s important to remember that these projections are just estimates. They are not guarantees of future success.

Business Plan Financial Projections FAQs

What is a business plan financial projection.

A business plan financial projection is a forecast of your company's future financial performance. It should include line items for each type of asset and liability, as well as a total at the end.

What are annual income statements? 

The Annual income statement is a financial document and a financial model that summarize a company's revenues and expenses over the course of a fiscal year. They provide a snapshot of a company's financial health and performance and can be used to track trends and make comparisons with other businesses.

What are the necessary financial statements?

The necessary financial statements for a business plan are an income statement, cash flow statement, and balance sheet.

How do I create financial projections?

You can create financial projections by making a list of assumptions, creating two scenarios (best case and worst case), conducting a ratio analysis, and being realistic.

Original text

Financial projections use existing or estimated financial data to forecast your business’s future income and expenses. They often include different scenarios to see how changes to one aspect of your finances (such as higher sales or lower operating expenses) might affect your profitability.

If you need to create financial projections for a startup or existing business, this free, downloadable template includes all the necessary tools.

What Are Financial Projections Used for?

Financial projections are an essential business planning tool for several reasons.

• If you’re starting a business, financial projections help you plan your startup budget, assess when you expect the business to become profitable, and set benchmarks for achieving financial goals.
• If you’re already in business, creating financial projections each year can help you set goals and stay on track.
• When seeking outside financing, startups and existing businesses need financial projections to convince lenders and investors of the business’s growth potential.

What’s Included in Financial Projections?

This financial projections template pulls together several different financial documents, including:

• Startup expenses
• Payroll costs
• Sales forecast
• Operating expenses for the first 3 years of business
• Cash flow statements for the first 3 years of business
• Income statements for the first 3 years of business
• Balance sheet
• Break-even analysis
• Financial ratios
• Cost of goods sold (COGS), and
• Amortization and depreciation for your business.

You can use this template to create the documents from scratch or pull in information from those you’ve already made. The template also includes diagnostic tools to test the numbers in your financial projections and ensure they are within reasonable ranges.

These areas are closely related, so as you work on your financial projections, you’ll find that changes to one element affect the others. You may want to include a best-case and worst-case scenario for all possibilities. Make sure you know the assumptions behind your financial projections and can explain them to others.

Startup business owners often wonder how to create financial projections for a business that doesn’t exist yet. Financial forecasts are continually educated guesses. To make yours as accurate as possible, do your homework and get help. Use the information you unearthed in researching your business plans, such as statistics from industry associations, data from government sources, and financials from similar businesses. An accountant with experience in your industry can help fine-tune your financial projections. So can business advisors such as SCORE mentors.

Once you complete your financial projections, don’t put them away and forget about them. Compare your projections to your financial statements regularly to see how well your business meets your expectations. If your projections turn out to be too optimistic or too pessimistic, make the necessary adjustments to make them more accurate.

*NOTE: The cells with formulas in this workbook are locked. If changes are needed, the unlock code is "1234." Please use caution when unlocking the spreadsheets. If you want to change a formula, we strongly recommend saving a copy of this spreadsheet under a different name before doing so. 

We recommend downloading the  Financial Projections Template Guide in English  or  Espanol .

Do you need help creating your financial projections? Take SCORE’s online course on-demand on financial projections or connect with a SCORE mentor  online or in your community today.

Simple Steps for Starting Your Business: Financial Projections In this online module, you'll learn the importance of financial planning, how to build your financial model, how to understand financial statements and more.

Business Planning & Financial Statements Template Gallery Download SCORE’s templates to help you plan for a new business startup or grow your existing business.

Why Projected Financial Statements Are Essential to the Future Success of Startups Financial statements are vital to the success of any company but particularly start-ups. SCORE mentor Sarah Hadjhamou shares why they are a big part of growing your start-up.

Copyright © 2024 SCORE Association, SCORE.org

Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

• TemplateLab

Financial Projections Templates

34 simple financial projections templates (excel,word).

A financial projections template is a tool that is an essential part of managing businesses as it serves as a guide for the various team to achieve the desired goals. The preparation of these projections seems like a difficult task, especially for small businesses. If you can come up with financial statements , then you can also make financial projections.

Table of Contents

• 1 Financial Projections Templates
• 2 When do you need a financial projections template?
• 3 Business Projections Templates
• 4 What to include in financial projections?
• 5 Financial Forecast Templates
• 6 How do I make a financial projection?
• 7 Revenue Projection Templates

When do you need a financial projections template?

A financial projections template uses estimated or existing financial information to forecast the future expenses and income of your business. These projections don’t just consider a single scenario but different ones so you can determine how the changes in one part of your finances might affect the profitability of your company.

If you have to create a financial business projections template for your business, you can download a template to make the task easier. Financial projection has become an important tool in business planning for the following reasons:

• If you’re starting a business venture, a financial projection helps you plan your start-up budget.
• If you already have a business, a financial projection helps you set your goals and stay on track.
• If you’re thinking about getting outside financing, you need a financial projection to convince investors or lenders of the potential of your business.

Business Projections Templates

What to include in financial projections?

A financial projections template usually includes a few financial statements that will help you achieve better financial performance for your business:

• Income Statement Also called the Profit and Loss Statement , this focuses on your company’s expenses and revenues generated for a specific period of time. A typical income statement includes expenses, revenue, losses, and gains. The sum of all these is the net income, a measure of your company’s profitability.
• Cash Flow Statement Taking a look at a cash flow statement makes you understand how your company’s operations work. The statement explains in detail how much money goes in and out of your business in the form of either expense or income. This document includes the following: Operating Activities The cash flow from operating activities reports cash outflows and inflows from your company’s daily operations. This includes changes in accounts receivable, cash, inventory, accounts payable, and depreciation. Investing Activities You use the cash flows from investing activities for your company’s investments into the long-term future. This includes cash outflows for purchases of fixed assets like equipment and property and cash inflows for sales of assets. Financing Activities The financial activities in a cash flow statement show your business’ sources of cash from either banks or investors along with expenditures of cash you have paid to your shareholders. Total these at the end of each period to determine either a loss or a profit. The cash flow statement gets connected to the income statement through net income. To make this document, it requires the reconciliation of the two documents. You can calculate net profitability or income in the income statement which you then use to start the cash flow from the operations category in your cash flow statement.
• Balance Sheet This is a statement of your business’ liabilities, assets, and capital at a specific point in time. It details the balance of expenditure and income over the preceding period. This document provides you with a general overview of your business’ financial health. Here is an overview of these components: Assets These are your business’ resources with economic value that your business owns and which you believe will provide some benefit in the future. Examples of such future benefits include reducing expenses, enhancing sales, or generating cash flow. Assets typically include inventory, property, and cash. Liabilities In general, these refer to the obligations of your business to other entities. In more common terms, these are the debts that your business incurs in your daily operations. It typically includes loans and accounts payable. You can classify liabilities either as short-term or long-term. Owner’s Equity This is the amount you have left after you have paid off your liabilities. It is usually classified as retained earnings – the sum of your net income earned minus all the dividends you have paid since the start of your business.

Together with your break-even analysis and financial statements, you can include any other document that will help explain the assumptions behind your cash flow and financial forecast template.

Financial Forecast Templates

How do I make a financial projection?

The creation of a financial projections template requires the same information to use whether your business is still in its planning stages or it’s already up and running. The difference is whether you’re creating your revenue projection template using historical financial information or if you need to start from scratch.

This includes the creation of projections based on your own experiences or by conducting market research in the industry in which your business will operate. Here are some tips for creating an effective business plan financial projections template:

• Create the sales projection An important component of your business projections template is the sales projections. A business that’s already running can base its projections on its past performance, which you can derive from financial statements. When creating your sales projections, you must consider some external factors like the projected and current health of your company, if your inventory will get affected by additional tariffs, or if there is a downturn in your industry. Even if you want to remain optimistic about your business, you have to make realistic plans.
• Create the expense projection At the onset, the creation of an expense projection seems simpler because it’s much easier to predict the possible expenses of your business than it is to predict potential customers or their buying habits. If you have experience working in a certain industry, you can predict with some degree of accuracy what your fixed expenses are and any recurring expenses. But when it comes to one-time expenses that have the potential to bring down your business, these are much harder to predict. The best thing you can do in this scenario is to project expenses to the best of your ability then increase this value by 15%.
• Come up with a balance sheet for your financial projections template If you have a business that has been in operation for a couple of months, you can come up with a balance sheet using accounting software. The balance sheet shows your business’ financial status, listing its liabilities, equity, and assets balance for a certain time period. Use the current totals in your balance sheet when making your financial projections, In doing so, you will make better predictions on where your business will be a few years in the future. If you’re still in the planning stage of a business, you can create a balance sheet based on the data you’ve gathered from industry research.
• Create the income statement projection If you have a business that is currently in operation, you can create an income statement projection using your existing income statements to create an estimate of your business’ projected numbers. This is a logical move since an income statement provides a picture of your business’s net income after subtracting things like taxes, cost of goods, and other expenses. One of the main purposes of the income statement is to provide an idea of your business’ current performance. It also serves as the basis for estimating your net income for the next couple of years. If your business is still in the planning stages, the creation of a potential income statement shows that you have conducted extensive research and created a diligent and well-crafted estimate of your income in the next couple of years. If you have uncertainties on how to start creating an income statement projection, you can consult with market research firms in your locale. They can provide you with an overview of your targeted industry which includes target markets, expected and current industry growth levels, and sales.
• Come up with a cash flow projection The creation of this document is the final step leading to the completion of your financial projection. The cash flow statement is directly connected to the balance sheet and the net income statement, showing any cash-related or cash activities that can affect your industry. One of the purposes of this statement is to show how much money your business spends. This is a must for businesses obtaining financing or looking for investors. You can use this cash flow statement if your business has been in operation for a minimum of six months, but if your business is still in the planning stages, you can use the information you have gathered to create a credible projection. To make things easier for you, consider using spreadsheet software. Chances are, you’re already using spreadsheets. Using a spreadsheet will be the starting point for your financial projections. In addition, it offers flexibility that allows you to quickly judge alternative scenarios or change assumptions. Be as clear and reasonable as possible with your financial projections. Remember that financial projection is as much science as art. At some point, you will have to make assumptions on certain things like how administrative costs and raw materials will grow, revenue growth, and how efficient you will be at gathering accounts receivable for your business.

Revenue Projection Templates

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Free Financial Templates for a Business Plan

By Andy Marker | July 29, 2020

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In this article, we’ve rounded up expert-tested financial templates for your business plan, all of which are free to download in Excel, Google Sheets, and PDF formats.

Included on this page, you’ll find the essential financial statement templates, including income statement templates , cash flow statement templates , and balance sheet templates . Plus, we cover the key elements of the financial section of a business plan .

Financial Plan Templates

Download and prepare these financial plan templates to include in your business plan. Use historical data and future projections to produce an overview of the financial health of your organization to support your business plan and gain buy-in from stakeholders

Business Financial Plan Template

Use this financial plan template to organize and prepare the financial section of your business plan. This customizable template has room to provide a financial overview, any important assumptions, key financial indicators and ratios, a break-even analysis, and pro forma financial statements to share key financial data with potential investors.

Download Financial Plan Template

Word | PDF | Smartsheet

Financial Plan Projections Template for Startups

This financial plan projections template comes as a set of pro forma templates designed to help startups. The template set includes a 12-month profit and loss statement, a balance sheet, and a cash flow statement for you to detail the current and projected financial position of a business.

‌ Download Startup Financial Projections Template

Excel | Smartsheet

Income Statement Templates for Business Plan

Also called profit and loss statements , these income statement templates will empower you to make critical business decisions by providing insight into your company, as well as illustrating the projected profitability associated with business activities. The numbers prepared in your income statement directly influence the cash flow and balance sheet forecasts.

Pro Forma Income Statement/Profit and Loss Sample

Use this pro forma income statement template to project income and expenses over a three-year time period. Pro forma income statements consider historical or market analysis data to calculate the estimated sales, cost of sales, profits, and more.

‌ Download Pro Forma Income Statement Sample - Excel

Small Business Profit and Loss Statement

Small businesses can use this simple profit and loss statement template to project income and expenses for a specific time period. Enter expected income, cost of goods sold, and business expenses, and the built-in formulas will automatically calculate the net income.

‌ Download Small Business Profit and Loss Template - Excel

3-Year Income Statement Template

Use this income statement template to calculate and assess the profit and loss generated by your business over three years. This template provides room to enter revenue and expenses associated with operating your business and allows you to track performance over time.

Download 3-Year Income Statement Template

For additional resources, including how to use profit and loss statements, visit “ Download Free Profit and Loss Templates .”

Cash Flow Statement Templates for Business Plan

Use these free cash flow statement templates to convey how efficiently your company manages the inflow and outflow of money. Use a cash flow statement to analyze the availability of liquid assets and your company’s ability to grow and sustain itself long term.

Simple Cash Flow Template

Use this basic cash flow template to compare your business cash flows against different time periods. Enter the beginning balance of cash on hand, and then detail itemized cash receipts, payments, costs of goods sold, and expenses. Once you enter those values, the built-in formulas will calculate total cash payments, net cash change, and the month ending cash position.

Download Simple Cash Flow Template

12-Month Cash Flow Forecast Template

Use this cash flow forecast template, also called a pro forma cash flow template, to track and compare expected and actual cash flow outcomes on a monthly and yearly basis. Enter the cash on hand at the beginning of each month, and then add the cash receipts (from customers, issuance of stock, and other operations). Finally, add the cash paid out (purchases made, wage expenses, and other cash outflow). Once you enter those values, the built-in formulas will calculate your cash position for each month with.

‌ Download 12-Month Cash Flow Forecast

3-Year Cash Flow Statement Template Set

Use this cash flow statement template set to analyze the amount of cash your company has compared to its expenses and liabilities. This template set contains a tab to create a monthly cash flow statement, a yearly cash flow statement, and a three-year cash flow statement to track cash flow for the operating, investing, and financing activities of your business.

Download 3-Year Cash Flow Statement Template

For additional information on managing your cash flow, including how to create a cash flow forecast, visit “ Free Cash Flow Statement Templates .”

Balance Sheet Templates for a Business Plan

Use these free balance sheet templates to convey the financial position of your business during a specific time period to potential investors and stakeholders.

Small Business Pro Forma Balance Sheet

Small businesses can use this pro forma balance sheet template to project account balances for assets, liabilities, and equity for a designated period. Established businesses can use this template (and its built-in formulas) to calculate key financial ratios, including working capital.

Download Pro Forma Balance Sheet Template

Monthly and Quarterly Balance Sheet Template

Use this balance sheet template to evaluate your company’s financial health on a monthly, quarterly, and annual basis. You can also use this template to project your financial position for a specified time in the future. Once you complete the balance sheet, you can compare and analyze your assets, liabilities, and equity on a quarter-over-quarter or year-over-year basis.

Download Monthly/Quarterly Balance Sheet Template - Excel

Yearly Balance Sheet Template

Use this balance sheet template to compare your company’s short and long-term assets, liabilities, and equity year-over-year. This template also provides calculations for common financial ratios with built-in formulas, so you can use it to evaluate account balances annually.

Download Yearly Balance Sheet Template - Excel

For more downloadable resources for a wide range of organizations, visit “ Free Balance Sheet Templates .”

Sales Forecast Templates for Business Plan

Sales projections are a fundamental part of a business plan, and should support all other components of your plan, including your market analysis, product offerings, and marketing plan . Use these sales forecast templates to estimate future sales, and ensure the numbers align with the sales numbers provided in your income statement.

Basic Sales Forecast Sample Template

Use this basic forecast template to project the sales of a specific product. Gather historical and industry sales data to generate monthly and yearly estimates of the number of units sold and the price per unit. Then, the pre-built formulas will calculate percentages automatically. You’ll also find details about which months provide the highest sales percentage, and the percentage change in sales month-over-month. 

Download Basic Sales Forecast Sample Template

12-Month Sales Forecast Template for Multiple Products

Use this sales forecast template to project the future sales of a business across multiple products or services over the course of a year. Enter your estimated monthly sales, and the built-in formulas will calculate annual totals. There is also space to record and track year-over-year sales, so you can pinpoint sales trends.

Download 12-Month Sales Forecasting Template for Multiple Products

3-Year Sales Forecast Template for Multiple Products

Use this sales forecast template to estimate the monthly and yearly sales for multiple products over a three-year period. Enter the monthly units sold, unit costs, and unit price. Once you enter those values, built-in formulas will automatically calculate revenue, margin per unit, and gross profit. This template also provides bar charts and line graphs to visually display sales and gross profit year over year.

Download 3-Year Sales Forecast Template - Excel

For a wider selection of resources to project your sales, visit “ Free Sales Forecasting Templates .”

Break-Even Analysis Template for Business Plan

A break-even analysis will help you ascertain the point at which a business, product, or service will become profitable. This analysis uses a calculation to pinpoint the number of service or unit sales you need to make to cover costs and make a profit.

Break-Even Analysis Template

Use this break-even analysis template to calculate the number of sales needed to become profitable. Enter the product's selling price at the top of the template, and then add the fixed and variable costs. Once you enter those values, the built-in formulas will calculate the total variable cost, the contribution margin, and break-even units and sales values.

Download Break-Even Analysis Template

For additional resources, visit, “ Free Financial Planning Templates .”

Business Budget Templates for Business Plan

These business budget templates will help you track costs (e.g., fixed and variable) and expenses (e.g., one-time and recurring) associated with starting and running a business. Having a detailed budget enables you to make sound strategic decisions, and should align with the expense values listed on your income statement.

Startup Budget Template

Use this startup budget template to track estimated and actual costs and expenses for various business categories, including administrative, marketing, labor, and other office costs. There is also room to provide funding estimates from investors, banks, and other sources to get a detailed view of the resources you need to start and operate your business.

Download Startup Budget Template

Small Business Budget Template

This business budget template is ideal for small businesses that want to record estimated revenue and expenditures on a monthly and yearly basis. This customizable template comes with a tab to list income, expenses, and a cash flow recording to track cash transactions and balances.

Download Small Business Budget Template

Professional Business Budget Template

Established organizations will appreciate this customizable business budget template, which  contains a separate tab to track projected business expenses, actual business expenses, variances, and an expense analysis. Once you enter projected and actual expenses, the built-in formulas will automatically calculate expense variances and populate the included visual charts. 

‌ Download Professional Business Budget Template

For additional resources to plan and track your business costs and expenses, visit “ Free Business Budget Templates for Any Company .”

Other Financial Templates for Business Plan

In this section, you’ll find additional financial templates that you may want to include as part of your larger business plan.

Startup Funding Requirements Template

This simple startup funding requirements template is useful for startups and small businesses that require funding to get business off the ground. The numbers generated in this template should align with those in your financial projections, and should detail the allocation of acquired capital to various startup expenses.

Download Startup Funding Requirements Template - Excel

Personnel Plan Template

Use this customizable personnel plan template to map out the current and future staff needed to get — and keep — the business running. This information belongs in the personnel section of a business plan, and details the job title, amount of pay, and hiring timeline for each position. This template calculates the monthly and yearly expenses associated with each role using built-in formulas. Additionally, you can add an organizational chart to provide a visual overview of the company’s structure. 

Download Personnel Plan Template - Excel

Elements of the Financial Section of a Business Plan

Whether your organization is a startup, a small business, or an enterprise, the financial plan is the cornerstone of any business plan. The financial section should demonstrate the feasibility and profitability of your idea and should support all other aspects of the business plan. 

Below, you’ll find a quick overview of the components of a solid financial plan.

• Financial Overview: This section provides a brief summary of the financial section, and includes key takeaways of the financial statements. If you prefer, you can also add a brief description of each statement in the respective statement’s section.
• Key Assumptions: This component details the basis for your financial projections, including tax and interest rates, economic climate, and other critical, underlying factors.
• Break-Even Analysis: This calculation helps establish the selling price of a product or service, and determines when a product or service should become profitable.
• Pro Forma Income Statement: Also known as a profit and loss statement, this section details the sales, cost of sales, profitability, and other vital financial information to stakeholders.
• Pro Forma Cash Flow Statement: This area outlines the projected cash inflows and outflows the business expects to generate from operating, financing, and investing activities during a specific timeframe.
• Pro Forma Balance Sheet: This document conveys how your business plans to manage assets, including receivables and inventory.
• Key Financial Indicators and Ratios: In this section, highlight key financial indicators and ratios extracted from financial statements that bankers, analysts, and investors can use to evaluate the financial health and position of your business.

Need help putting together the rest of your business plan? Check out our free simple business plan templates to get started. You can learn how to write a successful simple business plan  here . 

Visit this  free non-profit business plan template roundup  or download a  fill-in-the-blank business plan template  to make things easy. If you are looking for a business plan template by file type, visit our pages dedicated specifically to  Microsoft Excel ,  Microsoft Word , and  Adobe PDF  business plan templates. Read our articles offering  startup business plan templates  or  free 30-60-90-day business plan templates  to find more tailored options.

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How to make financial projections for business.

Writing a solid business plan should be the first step for any business owner looking to create a successful business. 

As a small business owner, you will want to get the attention of investors, partners, or potential highly skilled employees. It is, therefore, important to have a realistic financial forecast incorporated into your business plan. 

We’ll break down a financial projection and how to utilize it to give your business the best start possible.

Key Takeaways

Accurate financial projections are essential for businesses to succeed. In this article, we’ll explain everything you need to know about creating financial projections for your business. Here’s what you need to know about financial projections:

• A financial projection is a group of financial statements that are used to forecast future performance
• Creating financial projections can break down into 5 simple steps: sales projections, expense projections, balance sheet projections, income statement projections, and cash flow projections
• Financial projections can offer huge benefits to your business, including helping with forecasting future performance, ensuring steady cash flow, and planning key moves around the growth of the business

Here’s What We’ll Cover:

What Is a Financial Projection?

How to Create a Financial Projection

What goes into a financial projection, what are financial projections used for.

Financial Projections Advantages

Frequently Asked Questions

What Is Financial Projection?

A financial projection is essentially a set of financial statements . These statements will forecast future revenues and expenses. 

Any projection includes your cash inflows and outlays, your general income, and your balance sheet. 

They are perfect for showing bankers and investors how you plan to repay business loans. They also show what you intend to do with your money and how you expect your business to grow. 

Most projections are for the first 3-5 years of business, but some include a 10-year forecast too.

Either way, you will need to develop a short and mid-term projection broken down month by month. 

As you are just starting out with your business, you won’t be expected to provide exact details. Most financial projections are rough guesses. But they should also be educated guesses based on market trends, research, and looking at similar businesses. 

It’s incredibly important for financial statements to be realistic. Most investors will be able to spot a fanciful projection from a mile away. 

In general, most people would prefer to be given realistic projections, even if they’re not as impressive.

Financial projections are created to help business owners gain insight into the future of their company’s financials. 

The question is, how to create financial projections? For business plan purposes, it’s important that you follow the best practices of financial projection closely. This will ensure you get accurate insight, which is vital for existing businesses and new business startups alike.

Here are the steps for creating accurate financial projections for your business.

1. Start With A Sales Projection

For starters, you’ll need to project how much your business will make in sales. If you’re creating a sales forecast for an existing business, you’ll have past performance records to project your next period. Past data can provide useful information for your financial projection, such as if your sales do better in one season than another.

Be sure also to consider external factors, such as the economy at large, the potential for added tariffs and taxes in the future, supply chain issues, or industry downturns. 

The process is almost the same for new businesses, only without past data to refer to. Business startups will need to do more research on their industry to gain insight into potential future sales.

2. Create Your Expense Projection

Next, create an expense projection for your business. In a sense, this is an easier task than a sales projection since it seems simpler to predict your own behaviors than your customers. However, it’s vital that you expect the unexpected.

Optimism is great, but the worst-case scenario must be considered and accounted for in your expense projection. From accidents in the workplace to natural disasters, rising trade prices, to unexpected supply disruptions, you need to consider these large expenses in your projection. 

Something always comes up, so we suggest you add a 10-15% margin on your expense projection.

3. Create Your Balance Sheet Projection

A balance sheet projection is used to get a clear look at your business’s financial position related to assets, liabilities , and equity, giving you a more holistic view of the company’s overall financial health. 

For startup businesses, this can prove to be a lot of work since you won’t have existing records of past performance to pull from. This will need to be factored into your industry research to create an accurate financial projection.

For existing businesses, it will be more straightforward. Use your past and current balance sheets to predict your business’s position in the next 1-3 years. If you use a cloud-based, online accounting software with the feature to generate balance sheets, such as the one offered by FreshBooks, you’ll be able to quickly create balance sheets for your financial projection within the app.

Click here to learn more about the features of FreshBooks accounting software.

4. Make Your Income Statement Projection

Next up, create an income statement projection. An income statement is used to declare the net income of a business after all expenses have been made. In other words, it states the profits of a business.

For currently operating businesses, you can use your past income statements and the changes between them to create accurate predictions for the next 1-3 years. You can also use accounting software to generate your income statements automatically. 

You’ll need to work on rough estimates for new businesses or those still in the planning phase. It’s vital that you stay realistic and do your utmost to create an accurate, good-faith projection of future income. 

5. Finally, Create Your Cash Flow Projection

Last but not least is to generate your projected cash flow statement. A cash flow projection forecasts the movement of all money to and from your business. It’s intertwined with a business’s balance sheet and income statement, which is no different when creating projections. 

If your business has been operating for six months or more, you can create a fairly accurate cash flow projection with your past cash flow financial statements. For new businesses, you’ll need to factor in this step of creating a financial forecast when doing your industry research. 

It needs to include five elements to ensure an accurate, useful financial forecast for your business. These financial statements come together to provide greater insight into the projected future of a business’s financial health. These include:

Income Statement

A standard income statement summarizes your company’s revenues and expenses over a period. This is normally done either quarterly or annually.

The income statement is where you will do the bulk of your forecasting. 

On any income statement, you’re likely to find the following:

• Revenue: Your revenue earned through sales. 
• Expenses: The amount you’ve spent, including your product costs and your overheads.
• Pre-Tax Earnings: This is your income before you’ve paid tax.
• Net Income: The total revenues minus your total expenses. 

Net income is the most important number. If the number is positive, then you’re earning a profit, if it’s negative, it means your expenses outweigh your revenue and you’re making a loss. 

Cash Flow Statement

Your cash flow statement will show any potential investor whether you are a good credit risk. It also shows them if you can successfully repay any loans you are granted.

You can break a cash flow statement into three parts:

• Cash Revenues: An overview of your calculated cash sales for a given time period. 
• Cash Disbursements: You list all the cash expenditures you expect to pay.
• Net Cash Revenue: Take the cash revenues minus your cash disbursements.

Balance Sheet

Your balance sheet will show your business’s net worth at a given time.

A balance sheet is split up into three different sections:

• Assets: An asset is a tangible object of value that your company owns. It could be things like stock or property such as warehouses or offices. 
• Liabilities: These are any debts your business owes.
• Equity: Your equity is the summary of your assets minus your liabilities.

Looking for an easy-to-use yet capable online accounting software? FreshBooks accounting software is a cloud-based solution that makes financial projections simple. With countless financial reporting features and detailed guides on creating accurate financial forecasts, FreshBooks can help you gain the insight you need to let your business thrive. Click here to give FreshBooks a try for free.

Financial projections have many uses for current business owners and startup entrepreneurs. Provided your financial forecasting follows the best practices for an accurate projection, your data will be used for:

• Internal planning and budgeting – Your finances will be the main factor in whether or not you’ll be able to execute your business plan to completion. Financial projections allow you to make it happen.
• Attracting investors and securing funding – Whether you’re receiving financing from bank loans, investors, or both, an accurate projection will be essential in receiving the funds you need.
• Evaluating business performance and identifying areas for improvement – Financial projections help you keep track of your business’s financial health, allowing you to plan ahead and avoid unwelcome surprises.
• Making strategic business decisions – Timing is important in business, especially when it comes to major expenditures (new product rollouts, large-scale marketing, expansion, etc.). Financial projections allow you to make an informed strategy for these big decisions.

Financial Projections Advantages 

Creating clear financial projections for your business startup or existing company has countless benefits. Focusing on creating (and maintaining) good financial forecasting for your business will:

• Help you make vital financial decisions for the business in the future
• Help you plan and strategize for growth and expansion
• Demonstrate to bankers how you will repay your loans 
• Demonstrate to investors how you will repay financing
• Identify your most essential financing needs in the future
• Assist in fine-tuning your pricing
• Be helpful when strategizing your production plan
• Be a useful tool for planning your major expenditures strategically
• Help you keep an eye on your cash flow for the future

Your financial forecast is an essential part of your business plan, whether you’re still in the early startup phases or already running an established business. However, it’s vital that you follow the best practices laid out above to ensure you receive the full benefits of comprehensive financial forecasting.  

If you’re looking for a useful tool to save time on the administrative tasks of financial forecasting, FreshBooks can help. With the ability to instantly generate the reports you need and get a birds-eye-view of your business’s past performance and overall financial help, it will be easier to create useful financial projections that provide insight into your financial future. 

FAQs on Financial Projections

More questions about financial forecasting, projections, and how these processes fit into your business plan? Here are some frequently asked questions by business owners.

Why are financial projections important?

Financial projections allow you to gain insight into your business’s economic trajectory. This helps business owners make financial decisions, secure funding, and more. Additionally, financial projections provide early warning of roadblocks and challenges that may lay ahead for the company, making it easier to plan for a clear course of action.

What is an example of a financial projection?

A projection is an overall look at a business’s forecasted performance. It’s made up of several different statements and reports, such as a cash flow statement, income statement, profit and loss statement, and sales statement. You can find free templates and examples of many of these reports via FreshBooks. Click here to view our selection of accounting templates.

Are financial forecasts and financial projections the same?

Technically, there is a difference between forecasting and projections, though many use the terms interchangeably. Financial forecasting often refers to shorter-term (<1 year) predictions of financial performance, while financial projections usually focus on a larger time scale (2-3 years).

What is the most widely used method for financial forecasting?

The most common method of accurate forecasting is the straight-line forecasting method. It’s most often used for projecting the growth of a business’s revenue growth over a set period. If you notice that your records indicate a 4% growth of revenue per year for five years running, it would be reasonable to assume that this will continue year-over-year. 

What is the purpose of a financial projection?

Projection aims to get deeper, more nuanced insight into a business’s financial health and viability. It allows business owners to anticipate expenses and profit growth, giving them the tools to secure funding and loans and strategize major business decisions. It’s an essential accounting process that all business owners should prioritize in their business plans.

Michelle Alexander, CPA

About the author

Michelle Alexander is a CPA and implementation consultant for Artificial Intelligence-powered financial risk discovery technology. She has a Master's of Professional Accounting from the University of Saskatchewan, and has worked in external audit compliance and various finance roles for Government and Big 4. In her spare time you’ll find her traveling the world, shopping for antique jewelry, and painting watercolour floral arrangements.

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• Building Your Business

How To Create Financial Projections for Your Business

Learn how to anticipate your business’s financial performance

• Understanding Financial Projections & Forecasting

Why Forecasting Is Critical for Your Business

Key financial statements for forecasting, how to create your financial projections, frequently asked questions (faqs).

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Just like a weather forecast lets you know that wearing closed-toe shoes will be important for that afternoon downpour later, a good financial forecast allows you to better anticipate financial highs and lows for your business.

Neglecting to compile financial projections for your business may signal to investors that you’re unprepared for the future, which may cause you to lose out on funding opportunities.

Read on to learn more about financial projections, how to compile and use them in a business plan, and why they can be crucial for every business owner.

Key Takeaways

• Financial forecasting is a projection of your business's future revenues and expenses based on comparative data analysis, industry research, and more.
• Financial projections are a valuable tool for entrepreneurs as they offer insight into a business's ability to generate profit, increase cash flow, and repay debts, which can be attractive to investors.
• Some of the key components to include in a financial projection include a sales projection, break-even analysis, and pro forma balance sheet and income statement.
• A financial projection can not only attract investors, but helps business owners anticipate fixed costs, find a break-even point, and prepare for the unexpected.

Understanding Financial Projections and Forecasting

Financial forecasting is an educated estimate of future revenues and expenses that involves comparative analysis to get a snapshot of what could happen in your business’s future.

This process helps in making predictions about future business performance based on current financial information, industry trends, and economic conditions. Financial forecasting also helps businesses make decisions about investments, financing sources, inventory management, cost control strategies, and even whether to move into another market.

Developing both short- and mid-term projections is usually necessary to help you determine immediate production and personnel needs as well as future resource requirements for raw materials, equipment, and machinery.

Financial projections are a valuable tool for entrepreneurs as they offer insight into a business's ability to generate profit, increase cash flow, and repay debts. They can also be used to make informed decisions about the business’s plans. Creating an accurate, adaptive financial projection for your business offers many benefits, including:

• Attracting investors and convincing them to fund your business
• Anticipating problems before they arise
• Visualizing your small-business objectives and budgets
• Demonstrating how you will repay small-business loans
• Planning for more significant business expenses
• Showing business growth potential
• Helping with proper pricing and production planning

Financial forecasting is essentially predicting the revenue and expenses for a business venture. Whether your business is new or established, forecasting can play a vital role in helping you plan for the future and budget your funds.

Creating financial projections may be a necessary exercise for many businesses, particularly those that do not have sufficient cash flow or need to rely on customer credit to maintain operations. Compiling financial information, knowing your market, and understanding what your potential investors are looking for can enable you to make intelligent decisions about your assets and resources.

The income statement, balance sheet, and statement of cash flow are three key financial reports needed for forecasting that can also provide analysts with crucial information about a business's financial health. Here is a closer look at each.

Income Statement

An income statement, also known as a profit and loss statement or P&L, is a financial document that provides an overview of an organization's revenues, expenses, and net income.

Balance Sheet

The balance sheet is a snapshot of the business's assets and liabilities at a certain point in time. Sometimes referred to as the “financial portrait” of a business, the balance sheet provides an overview of how much money the business has, what it owes, and its net worth.

The assets side of the balance sheet includes what the business owns as well as future ownership items. The other side of the sheet includes liabilities and equity, which represent what it owes or what others owe to the business.

A balance sheet that shows hypothetical calculations and future financial projections is also referred to as a “pro forma” balance sheet.

Cash Flow Statement

A cash flow statement monitors the business’s inflows and outflows—both cash and non-cash. Cash flow is the business’s projected earnings before interest, taxes, depreciation, and amortization ( EBITDA ) minus capital investments.

Here's how to compile your financial projections and fit the results into the three above statements.

A financial projections spreadsheet for your business should include these metrics and figures:

• Sales forecast
• Balance sheet
• Operating expenses
• Payroll expenses (if applicable)
• Amortization and depreciation
• Cash flow statement
• Income statement
• Cost of goods sold (COGS)
• Break-even analysis

Here are key steps to account for creating your financial projections.

Projecting Sales

The first step for a financial forecast starts with projecting your business’s sales, which are typically derived from past revenue as well as industry research. These projections allow businesses to understand what their risks are and how much they will need in terms of staffing, resources, and funding.

Sales forecasts also enable businesses to decide on important levels such as product variety, price points, and inventory capacity.

Income Statement Calculations

A projected income statement shows how much you expect in revenue and profit—as well as your estimated expenses and losses—over a specific time in the future. Like a standard income statement, elements on a projection include revenue, COGS, and expenses that you’ll calculate to determine figures such as the business’s gross profit margin and net income.

If you’re developing a hypothetical, or pro forma, income statement, you can use historical data from previous years’ income statements. You can also do a comparative analysis of two different income statement periods to come up with your figures.

Anticipate Fixed Costs

Fixed business costs are expenses that do not change based on the number of products sold. The best way to anticipate fixed business costs is to research your industry and prepare a budget using actual numbers from competitors in the industry. Anticipating fixed costs ensures your business doesn’t overpay for its needs and balances out its variable costs. A few examples of fixed business costs include:

• Rent or mortgage payments
• Operating expenses (also called selling, general and administrative expenses or SG&A)
• Utility bills
• Insurance premiums

Unfortunately, it might not be possible to predict accurately how much your fixed costs will change in a year due to variables such as inflation, property, and interest rates. It’s best to slightly overestimate fixed costs just in case you need to account for these potential fluctuations.

Find Your Break-Even Point

The break-even point (BEP) is the number at which a business has the same expenses as its revenue. In other words, it occurs when your operations generate enough revenue to cover all of your business’s costs and expenses. The BEP will differ depending on the type of business, market conditions, and other factors.

To find this number, you need to determine two things: your fixed costs and variable costs. Once you have these figures, you can find your BEP using this formula:

Break-even point = fixed expenses ➗ 1 – (variable expenses ➗ sales)

The BEP is an essential consideration for any projection because it is the point at which total revenue from a project equals total cost. This makes it the point of either profit or loss.

Plan for the Unexpected

It is necessary to have the proper financial safeguards in place to prepare for any unanticipated costs. A sudden vehicle repair, a leaky roof, or broken equipment can quickly derail your budget if you aren't prepared. Cash management is a financial management plan that ensures a business has enough cash on hand to maintain operations and meet short-term obligations.

To maintain cash reserves, you can apply for overdraft protection or an overdraft line of credit. Overdraft protection can be set up by a bank or credit card business and provides short-term loans if the account balance falls below zero. On the other hand, a line of credit is an agreement with a lending institution in which they provide you with an unsecured loan at any time until your balance reaches zero again.

How do you make financial projections for startups?

Financial projections for startups can be hard to complete. Historical financial data may not be available. Find someone with financial projections experience to give insight on risks and outcomes.

Consider business forecasting, too, which incorporates assumptions about the exponential growth of your business.

Startups can also benefit from using EBITDA to get a better look at potential cash flow.

What are the benefits associated with forecasting business finances?

Forecasting can be beneficial for businesses in many ways, including:

• Providing better understanding of your business cash flow
• Easing the process of planning and budgeting for the future based on income
• Improving decision-making
• Providing valuable insight into what's in their future
• Making decisions on how to best allocate resources for success

How many years should your financial forecast be?

Your financial forecast should either be projected over a specific time period or projected into perpetuity. There are various methods for determining how long a financial forecasting projection should go out, but many businesses use one to five years as a standard timeframe.

U.S. Small Business Administration. " Market Research and Competitive Analysis ."

Score. " Financial Projections Template ."

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How to Write the Financial Section of a Business Plan

An outline of your company's growth strategy is essential to a business plan, but it just isn't complete without the numbers to back it up. here's some advice on how to include things like a sales forecast, expense budget, and cash-flow statement..

A business plan is all conceptual until you start filling in the numbers and terms. The sections about your marketing plan and strategy are interesting to read, but they don't mean a thing if you can't justify your business with good figures on the bottom line. You do this in a distinct section of your business plan for financial forecasts and statements. The financial section of a business plan is one of the most essential components of the plan, as you will need it if you have any hope of winning over investors or obtaining a bank loan. Even if you don't need financing, you should compile a financial forecast in order to simply be successful in steering your business. "This is what will tell you whether the business will be viable or whether you are wasting your time and/or money," says Linda Pinson, author of Automate Your Business Plan for Windows  (Out of Your Mind 2008) and Anatomy of a Business Plan (Out of Your Mind 2008), who runs a publishing and software business Out of Your Mind and Into the Marketplace . "In many instances, it will tell you that you should not be going into this business." The following will cover what the financial section of a business plan is, what it should include, and how you should use it to not only win financing but to better manage your business.

Dig Deeper: Generating an Accurate Sales Forecast

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How to Write the Financial Section of a Business Plan: The Purpose of the Financial Section Let's start by explaining what the financial section of a business plan is not. Realize that the financial section is not the same as accounting. Many people get confused about this because the financial projections that you include--profit and loss, balance sheet, and cash flow--look similar to accounting statements your business generates. But accounting looks back in time, starting today and taking a historical view. Business planning or forecasting is a forward-looking view, starting today and going into the future. "You don't do financials in a business plan the same way you calculate the details in your accounting reports," says Tim Berry, president and founder of Palo Alto Software, who blogs at Bplans.com and is writing a book, The Plan-As-You-Go Business Plan. "It's not tax reporting. It's an elaborate educated guess." What this means, says Berry, is that you summarize and aggregate more than you might with accounting, which deals more in detail. "You don't have to imagine all future asset purchases with hypothetical dates and hypothetical depreciation schedules to estimate future depreciation," he says. "You can just guess based on past results. And you don't spend a lot of time on minute details in a financial forecast that depends on an educated guess for sales." The purpose of the financial section of a business plan is two-fold. You're going to need it if you are seeking investment from venture capitalists, angel investors, or even smart family members. They are going to want to see numbers that say your business will grow--and quickly--and that there is an exit strategy for them on the horizon, during which they can make a profit. Any bank or lender will also ask to see these numbers as well to make sure you can repay your loan. But the most important reason to compile this financial forecast is for your own benefit, so you understand how you project your business will do. "This is an ongoing, living document. It should be a guide to running your business," Pinson says. "And at any particular time you feel you need funding or financing, then you are prepared to go with your documents." If there is a rule of thumb when filling in the numbers in the financial section of your business plan, it's this: Be realistic. "There is a tremendous problem with the hockey-stick forecast" that projects growth as steady until it shoots up like the end of a hockey stick, Berry says. "They really aren't credible." Berry, who acts as an angel investor with the Willamette Angel Conference, says that while a startling growth trajectory is something that would-be investors would love to see, it's most often not a believable growth forecast. "Everyone wants to get involved in the next Google or Twitter, but every plan seems to have this hockey stick forecast," he says. "Sales are going along flat, but six months from now there is a huge turn and everything gets amazing, assuming they get the investors' money."  The way you come up a credible financial section for your business plan is to demonstrate that it's realistic. One way, Berry says, is to break the figures into components, by sales channel or target market segment, and provide realistic estimates for sales and revenue. "It's not exactly data, because you're still guessing the future. But if you break the guess into component guesses and look at each one individually, it somehow feels better," Berry says. "Nobody wins by overly optimistic or overly pessimistic forecasts."

Dig Deeper: What Angel Investors Look For

How to Write the Financial Section of a Business Plan: The Components of a Financial Section

A financial forecast isn't necessarily compiled in sequence. And you most likely won't present it in the final document in the same sequence you compile the figures and documents. Berry says that it's typical to start in one place and jump back and forth. For example, what you see in the cash-flow plan might mean going back to change estimates for sales and expenses.  Still, he says that it's easier to explain in sequence, as long as you understand that you don't start at step one and go to step six without looking back--a lot--in between.

• Start with a sales forecast. Set up a spreadsheet projecting your sales over the course of three years. Set up different sections for different lines of sales and columns for every month for the first year and either on a monthly or quarterly basis for the second and third years. "Ideally you want to project in spreadsheet blocks that include one block for unit sales, one block for pricing, a third block that multiplies units times price to calculate sales, a fourth block that has unit costs, and a fifth that multiplies units times unit cost to calculate cost of sales (also called COGS or direct costs)," Berry says. "Why do you want cost of sales in a sales forecast? Because you want to calculate gross margin. Gross margin is sales less cost of sales, and it's a useful number for comparing with different standard industry ratios." If it's a new product or a new line of business, you have to make an educated guess. The best way to do that, Berry says, is to look at past results.
• Create an expenses budget. You're going to need to understand how much it's going to cost you to actually make the sales you have forecast. Berry likes to differentiate between fixed costs (i.e., rent and payroll) and variable costs (i.e., most advertising and promotional expenses), because it's a good thing for a business to know. "Lower fixed costs mean less risk, which might be theoretical in business schools but are very concrete when you have rent and payroll checks to sign," Berry says. "Most of your variable costs are in those direct costs that belong in your sales forecast, but there are also some variable expenses, like ads and rebates and such." Once again, this is a forecast, not accounting, and you're going to have to estimate things like interest and taxes. Berry recommends you go with simple math. He says multiply estimated profits times your best-guess tax percentage rate to estimate taxes. And then multiply your estimated debts balance times an estimated interest rate to estimate interest.
• Develop a cash-flow statement. This is the statement that shows physical dollars moving in and out of the business. "Cash flow is king," Pinson says. You base this partly on your sales forecasts, balance sheet items, and other assumptions. If you are operating an existing business, you should have historical documents, such as profit and loss statements and balance sheets from years past to base these forecasts on. If you are starting a new business and do not have these historical financial statements, you start by projecting a cash-flow statement broken down into 12 months. Pinson says that it's important to understand when compiling this cash-flow projection that you need to choose a realistic ratio for how many of your invoices will be paid in cash, 30 days, 60 days, 90 days and so on. You don't want to be surprised that you only collect 80 percent of your invoices in the first 30 days when you are counting on 100 percent to pay your expenses, she says. Some business planning software programs will have these formulas built in to help you make these projections.
• Income projections. This is your pro forma profit and loss statement, detailing forecasts for your business for the coming three years. Use the numbers that you put in your sales forecast, expense projections, and cash flow statement. "Sales, lest cost of sales, is gross margin," Berry says. "Gross margin, less expenses, interest, and taxes, is net profit."
• Deal with assets and liabilities. You also need a projected balance sheet. You have to deal with assets and liabilities that aren't in the profits and loss statement and project the net worth of your business at the end of the fiscal year. Some of those are obvious and affect you at only the beginning, like startup assets. A lot are not obvious. "Interest is in the profit and loss, but repayment of principle isn't," Berry says. "Taking out a loan, giving out a loan, and inventory show up only in assets--until you pay for them." So the way to compile this is to start with assets, and estimate what you'll have on hand, month by month for cash, accounts receivable (money owed to you), inventory if you have it, and substantial assets like land, buildings, and equipment. Then figure out what you have as liabilities--meaning debts. That's money you owe because you haven't paid bills (which is called accounts payable) and the debts you have because of outstanding loans.
• Breakeven analysis. The breakeven point, Pinson says, is when your business's expenses match your sales or service volume. The three-year income projection will enable you to undertake this analysis. "If your business is viable, at a certain period of time your overall revenue will exceed your overall expenses, including interest." This is an important analysis for potential investors, who want to know that they are investing in a fast-growing business with an exit strategy.

Dig Deeper: How to Price Business Services

How to Write the Financial Section of a Business Plan: How to Use the Financial Section One of the biggest mistakes business people make is to look at their business plan, and particularly the financial section, only once a year. "I like to quote former President Dwight D. Eisenhower," says Berry. "'The plan is useless, but planning is essential.' What people do wrong is focus on the plan, and once the plan is done, it's forgotten. It's really a shame, because they could have used it as a tool for managing the company." In fact, Berry recommends that business executives sit down with the business plan once a month and fill in the actual numbers in the profit and loss statement and compare those numbers with projections. And then use those comparisons to revise projections in the future. Pinson also recommends that you undertake a financial statement analysis to develop a study of relationships and compare items in your financial statements, compare financial statements over time, and even compare your statements to those of other businesses. Part of this is a ratio analysis. She recommends you do some homework and find out some of the prevailing ratios used in your industry for liquidity analysis, profitability analysis, and debt and compare those standard ratios with your own. "This is all for your benefit," she says. "That's what financial statements are for. You should be utilizing your financial statements to measure your business against what you did in prior years or to measure your business against another business like yours."  If you are using your business plan to attract investment or get a loan, you may also include a business financial history as part of the financial section. This is a summary of your business from its start to the present. Sometimes a bank might have a section like this on a loan application. If you are seeking a loan, you may need to add supplementary documents to the financial section, such as the owner's financial statements, listing assets and liabilities. All of the various calculations you need to assemble the financial section of a business plan are a good reason to look for business planning software, so you can have this on your computer and make sure you get this right. Software programs also let you use some of your projections in the financial section to create pie charts or bar graphs that you can use elsewhere in your business plan to highlight your financials, your sales history, or your projected income over three years. "It's a pretty well-known fact that if you are going to seek equity investment from venture capitalists or angel investors," Pinson says, "they do like visuals."

Dig Deeper: How to Protect Your Margins in a Downturn

Related Links: Making It All Add Up: The Financial Section of a Business Plan One of the major benefits of creating a business plan is that it forces entrepreneurs to confront their company's finances squarely. Persuasive Projections You can avoid some of the most common mistakes by following this list of dos and don'ts. Making Your Financials Add Up No business plan is complete until it contains a set of financial projections that are not only inspiring but also logical and defensible. How many years should my financial projections cover for a new business? Some guidelines on what to include. Recommended Resources: Bplans.com More than 100 free sample business plans, plus articles, tips, and tools for developing your plan. Planning, Startups, Stories: Basic Business Numbers An online video in author Tim Berry's blog, outlining what you really need to know about basic business numbers. Out of Your Mind and Into the Marketplace Linda Pinson's business selling books and software for business planning. Palo Alto Software Business-planning tools and information from the maker of the Business Plan Pro software. U.S. Small Business Administration Government-sponsored website aiding small and midsize businesses. Financial Statement Section of a Business Plan for Start-Ups A guide to writing the financial section of a business plan developed by SCORE of northeastern Massachusetts.

Editorial Disclosure: Inc. writes about products and services in this and other articles. These articles are editorially independent - that means editors and reporters research and write on these products free of any influence of any marketing or sales departments. In other words, no one is telling our reporters or editors what to write or to include any particular positive or negative information about these products or services in the article. The article's content is entirely at the discretion of the reporter and editor. You will notice, however, that sometimes we include links to these products and services in the articles. When readers click on these links, and buy these products or services, Inc may be compensated. This e-commerce based advertising model - like every other ad on our article pages - has no impact on our editorial coverage. Reporters and editors don't add those links, nor will they manage them. This advertising model, like others you see on Inc, supports the independent journalism you find on this site.

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Financial Projection Templates to Help You with Planning

Written by: Raja Mandal

Evaluating your company’s financial performance is great. But planning for the future is just as important.

Sound financial projections give startups and established businesses a significant boost in making informed decisions and preparing for unexpected events. It forecasts estimated cash flow, sales, expenses, profit and other financial results you plan to achieve.

But that’s not all. When seeking funding, financial projections not only validate your business to investors or partners but also convince them of its growth potential.

So, how do you create one? Financial projection templates make the entire process a breeze. In this article, we’ve compiled 14 financial projection templates to simplify your financial planning process and help you make well-informed business decisions.

Table of Contents

What is a financial projection.

• What Should be Included in Financial Projections?
• 14 Financial Project Templates to Use

How to Create Financial Projections with Visme

Financial projections faqs.

• A financial projection is an estimate of future revenue, expenses and profits for a business. It helps decision-makers plan and strategize based on these predicted financial outcomes.
• The critical elements of a financial projection are the income statements, cash flow and balance sheet.
• Choose from Visme's financial projection and budget templates , ranging from presentations and reports to tables and dashboards.
• Customize your templates using Visme's advanced tools and features, like the dynamic fields, brand wizard, collaboration tools and more.
• Sign up for a free Visme account to create your financial projections easily.

A financial projection is a forecast of a business's future financial performance. It helps you estimate critical financial figures, such as revenues, expenses and profits, over a specific period.

By creating financial projections, business owners can plan, make informed decisions, and prepare for various possibilities. These predictions also act as a roadmap to guide growth, attract investors and estimate profitability.

Therefore, financial projections are necessary to run a business successfully, regardless of size and type.

Here's an example of what a financial projection document looks like and the insights it offers.

What Should Be Included in Financial Projections?

When creating a financial projection, there are three main sections you should focus on. These are the income statements, cash flow projections and balance sheet projections.

1. Income Statements

This is the storyteller of your company's performance, focusing on four essential items: revenue, expenses, gains and losses over a specific period. It reflects the results of your business operations and provides insights into whether you are losing or making money.

The income statements display your company's revenue, gross margin, costs, gross profit, taxes paid, marketing and other expenses.

This example shows your projected income statements.

2. Cash Flow Projections

Cash flow projections forecast the amount of money expected to come in and go out over a specific period. This report will help you manage your business operations and payments more effectively, especially during negative cash flow.

Additionally, it provides a quick overview of your company's liquidity and short-term financial stability.

3. Balance Sheet Projections

The balance sheet projection gives you a bird's eye view of your business's financial health. It forecasts your assets, liabilities and equity. By incorporating it into your financial projection, you can predict your financial status, plan for funding requirements and assure stakeholders about the financial stability of your business.

RELATED READING: 11 Best Financial Dashboards to Track Sales, KPIs & Metrics

14 Financial Projection Templates

Use these comprehensive templates to analyze and forecast your business's financial future. The templates are fully customizable, ranging from presentations and reports to budgets and tables.

Choose your template wisely and customize it using Visme’s budget planner .

Visme's tools and templates have enabled thousands of businesses across the globe to create valuable documents even with little or no design knowledge.

But don’t just take our word for it. Here's what one of our satisfied users has to say about Visme.

Helene Dunbar and Amanda Aultman

Internal Communications Specialists, HouseCalls

You can read the full case study about How a Communications Team Was Able to Create Visual Content 60% Faster With Visme.

1. Financial Projections Presentation Template

This financial projection template is designed to transform your data into meaningful insights. It provides a clear and concise overview of your financial projections, including income statements, balance sheets, assets, liabilities and equity.

The tool offers unique features—such as radial gauges for income statement predictions and a dual chart—that visually illustrate total liabilities and equity. Additionally, the template showcases balance sheet ratios across different countries using an innovative vertical bar graph, providing a global perspective.

Visme's AI presentation maker can help you create professional-looking financial projection presentations in just a few minutes. This advanced tool simplifies the design process and helps you reduce the time spent on presentation design.

Provide your prompt, choose your preferred style, and the tool will generate everything - including the text, images and illustrations.

2. Financial Projections Presentation Modern Template

Here's a template that looks similar to the previous one but comes in a different color. However, with Visme, you don't have to restrict yourself to a limited color palette. In the editor, you can use the color wheel to create your own unique colors, apply a specific HEX code or choose from any of the color presets available.

3. Balance Sheet Presentation Template

Whether reviewing your company's finances or presenting to stakeholders, this balance sheet presentation template is a great way to show your financial projection.

It's designed with separate slides for different financial aspects, such as assets, liabilities and stockholder equity. The template also separates current and long-term liabilities into distinct slides and tables, making it easy to organize your financial data.

Turn numbers and statistics from your balance sheet into beautiful, meaningful visuals using Visme's data visualization tools . Visme offers 30+ data widgets such as radial gauges, progress bars, population arrays and many others to help you visualize data.

For larger data sets, you can choose from 20+ types of charts and graphs, including bar graphs , line graphs , pie charts and more.

4. Financial Audit Report Template

A well-audited financial report is crucial for financial projections and this template provides a classic way to communicate your findings effectively without drowning in numbers.

This comprehensive template presents asset data, including current and fixed assets and other elements such as income statements, cash flow, liabilities and partners' capital deficits. It displays detailed information in organized tables, with the added clarity of table and bar graphs for income statements.

Using this template makes it easy for you to spot trends and make forecasts in your business finances.

Are you looking for a way to save time on report creation? Visme's AI report writer is the solution you need. Whether you are compiling a quarterly financial summary or an end-of-year financial analysis, the tool guides you through the process.

All you need to do is generate your first draft report using a prompt. Once you've done that, you can choose a style and the tool will generate text, graphics and visuals to match. And if you want to make further tweaks, customize the template until you're happy with the final design.

5. Financial Statements Presentation Template

Illustrate your company's financial performance to ensure accuracy for tax, financing or investing purposes using this financial statement presentation template.

This template combats information overload by focusing on key facts, presented with minimal text and maximized data visibility. The creative use of icons and images reinforces information, making it more digestible and engaging. It's the perfect tool to present complex financial figures and estimates in an appealing and easy-to-understand format.

And if you need help writing the content for your financial projection templates, Visme’s AI writer is here to help. It can draft an entire financial statement, create a structure for your presentation and even proofread your text for grammatical or syntax mistakes.

Need to summarize a hefty report? Visme AI Writer can do it. Need persuasive CTAs for your stakeholders? It has you covered. All you need to do is explain what you want the tool to do for you and you're good to go.

6. Financial Analysis Presentation Template

The financial analysis presentation template empowers you to create a vivid, compelling narrative about your organization's financial health. It focuses on critical financial elements such as the profit vs. loss landscape, project earning capacity, assets and the operating profitability ratio.

With this template, you can easily translate complex figures into a simplified visual language that anyone can understand. You can quickly and efficiently explain your financial standpoints by examining assets and disclosing your operating profitability ratio.

Apply your brand's visual identity to your financial projection templates easily using Visme's brand design tool .

Simply copy and paste your website URL and the brand wizard will extract your brand colors , brand fonts and company logo from your website. Once saved, anyone from your team can apply your branding elements to any design with a single click.

This will help you establish credibility and reinforce your brand identity while presenting financial insights to stakeholders and team members.

7. Company Finance Report Template

The company finance report template simplifies how you analyze your business's finances. It clarifies the amount of money your company has and the amount it owes by breaking down assets and liabilities. It also allows you to compare your expected financial outcomes with the actual results, guiding you to stay on track.

Additionally, it summarizes financial market movements, helping you understand how your company fits into the larger financial landscape. It makes tracking your monthly operational expenses smoother, enabling you to manage costs effectively.

8. Company Financial Budget Template

A budget template makes it easy for you to plan and control financial activities in your business.

This company financial budget template helps you navigate the crucial aspects of budgeting, such as salaries, operating expenses and other miscellaneous costs. It strengthens your budgeting process with detailed income statements, ensuring you have a comprehensive view of your cash inflows, outflows and net cash flow.

Use Visme's dynamic fields feature to maintain consistency across all your financial projection documents. Create custom fields such as costs, revenue projections, profit margins or anything else you want.

Whenever you update the information, the tool automatically updates all the other documents or projects containing these fields. This way, you can ensure that your financial projections are always up-to-date and accurate.

9. Company Operating Budget Template

Use this template to plan your company's operating budget and create the sales forecast, the crucial elements for financial projections. It provides a detailed revenue and expense expectations plan, enabling you to predict future financial performance, strategically allocate resources and make informed decisions to achieve your financial goals.

It helps you simplify your company's cash flow and guides you toward fiscal targets with precision for upcoming periods or long-term planning.

Creating financial projection documents can be a complex task. It often requires the active collaboration of different members across an organization.

Visme's design collaboration tools can help simplify this process. It brings transparency, efficiency and security to the task.

With Visme, you can share the financial projection template with your team by sending email invitations or sharing a project link. It allows them to leave comments, annotate specific elements and edit the document together.

10. Company Expenses Report Template

Accurate tracking of expenses and smart budgeting are essential for the success of any business. This company expenses report template is designed to be your perfect companion in achieving this. It helps you systematically categorize your major corporate expenses, such as employee, office and marketing.

This template is not just a record of what you spend. It's also a tool to help you identify potential areas where you could better allocate the budget. It highlights sections where the expenditure proves beneficial, deserving more allocation and points out those costs you could cut.

With Visme's workflow management features , customizing your financial project and expense reports templates becomes more efficient and organized. You can assign specific tasks to team members and manage roles, tasks, progress and deadlines in one place.

11. Financial Projection Model Table Consulting Template

Forecasting a company’s financial future is no small task. The financial projection template is a comprehensive yet concise one-pager that provides a data tableau for each year over a specific period.

It features information about debts, liabilities, overdue amounts, assets and a detailed snapshot of your company’s financial status.

This template ensures key stakeholders can quickly grasp your financial standing and predict future trends. Besides the concise presentation, the template can be a valuable tool for strategists and analysts conducting in-depth studies on the company’s financial health.

12. Cash Flow Financial Model Table Template

The cash flow financial model table template is an easy-to-use tool that helps you manage and comprehend your business' finances. This template includes sections for all of your financial activities. It begins with the income earned from sales, grants and refunds.

Then, there is a segment that lists all the expenses of running your business, from buying supplies to paying for advertisements or investing in the growth of your business. All of this data allows you to determine whether you are earning more money than you are spending or the opposite.

13. Monthly Operating Expenses Dashboard Template

The monthly operating expenses dashboard template is an invaluable resource for keeping track of your financial activity and budget effectively. This template visually represents your company's monthly expenses, clearly showing expenditures across different categories, such as salaries, utilities and office supplies.

Using this organized and concise dashboard, you can quickly assess your spending, identify cost-saving opportunities and make more informed operational decisions to maintain financial stability.

With Visme's animation and interactivity tools , you can bring your financial projection templates to life.

With these tools, you can create interactive elements such as clickable menus, pop-ups, hover effects and more. You can add animated icons, illustrations and special effects to make the document more engaging.

14. Financial Performance Dashboard Template

With an intuitive and visually appealing layout and bar graphs, this dashboard displays critical financial metrics, including revenue, net profit and cash flow. The dashboard makes it easy for financial analysts to compare the current and previous month's performance and calculate the month-on-month change.

Seamlessly integrate your favorite applications like HubSpot , Salesforce and Mailchimp with Visme. This integration lets you export your charts, graphs and dashboards into third-party platforms for real-time insights into your financial performance.

For instance, you can integrate Salesforce data into your Visme documents to get live sales pipeline data and customer behavior that directly influences your financial projections.

Creating financial projections is straightforward with Visme. Just follow these three simple steps:

Step 1: Login to Visme and Choose Your Template

First things first, head over to the Visme website. If you're new, sign up for an account using your name and email address. If you already have an account, simply log in.

Once you're in, browse through Visme's collection of templates and pick one for financial projections. You’ll find a design that aligns well with your business needs and aesthetics.

Step 2: Customize the Template

The next step is to make that template yours. There are many ways to customize your templates in Visme.

Adjust the numbers/figures

One of the first steps in customizing the template includes adjusting the projected revenue forecasts, expense estimates and other figures. You'll find preset numerical values you can replace with your own to make the document valid for your business.

Modify the company details

Insert your company's name, address, and other details into the template. This will make the template uniquely yours and aid in better business recognition.

Change the fonts and colors

Visme lets you change fonts and colors according to your liking or brand image. You can use Visme's color wheel to create your own colors, copy-paste a HEX code or choose from the color presets.

Also, Visme comes with various fonts and font combinations that you can choose from.

Add or edit graphs and charts

To visualize more extensive data sets, you can choose from 20+ types of charts and graphs . Or, use the data widgets like progress bars, population arrays and radial gauges to visualize smaller data sets.

Edit the existing data visualizations to input your own values just by clicking on them and changing them from the sidebar.

Step 3: Download, Share, or Publish Your Document

After fine-tuning your financial projection, it's time to download and share it . Download your document in formats like PDF, JPG or PNG for offline use.

If you want to share it directly with colleagues or stakeholders online, Visme allows you to generate a shareable link. You can even publish your work online by generating a snippet of code to embed it on your website or landing page.

Q. Why Are Financial Projections Important?

Financial projections are crucial for several reasons:

• They help businesses establish goals and create a roadmap for achieving them.
• Projections guide businesses in allocating resources and managing cash flow, ensuring they remain financially stable.
• They allow businesses to make informed decisions based on their financial outlook, helping them mitigate risks and capitalize on opportunities.
• Investors and lenders constantly require financial projections to evaluate a business's potential for success, growth and ability to repay loans.
• Regularly updating and comparing projections with actual financial results can help identify areas where a business is underperforming and needs improvement.

Q. What Are Financial Projections Used for?

Businesses use financial projections for these purposes below

• Estimate the future financial performance of a business based on historical data and future assumptions
• Plan and make decisions about budgeting, investments, and overall financial strategy.
• Identify potential risks and opportunities, and can also be used to attract investors or secure financing.
• Forecast their financial future and make informed decisions based on that forecast.
• When a business or individual is planning to start a new venture, launch a new product or service or expand an existing operation.

Q. How to Calculate Financial Projections for Business Plan

To calculate financial projections for a business plan, you will need to estimate the future revenue, expenses and cash flow of your business.

• Start by creating a sales forecast based on market research and historical sales data.
• Then, estimate your cost of goods sold, operating expenses, and capital expenditures.
• Use these estimates to calculate your projected profit and loss statement, balance sheet and cash flow statement.
• Review and adjust your financial projections regularly as your business evolves and market conditions change.

Q. What Is a 3-Year Financial Projection?

A 3 year financial projection is a document that estimates a company's future financial position based on expected revenues, expenses and cash flow over a three-year period.

Q. How to Do a 3-Year Financial Projection?

Here's how you can make a 3-year financial projection:

• Sales Projection: Analyze past sales data, observe current market trends, and consider the impact of your potential marketing or strategic initiatives. Use these to forecast your sales for the next three years.
• Expense Projection: Identify all business costs, including raw materials, labor, marketing, rent, utilities, etc., and gather them over three years. Remember to consider expected inflation or cost increases.
• Balance Sheet Projection: Project your assets, liabilities and equity for each year based on your sales and expense forecasts.
• Income Statement Projection: Use your sales and expense projections to estimate yearly net income and sales.
• Cash Flow Projection: Forecast all cash inflows and outflows and keep track of your closing cash balance at the end of each year. This helps identify when you need additional funding.

Q. Is Financial Projection the Same as Financial Plan?

No, a financial projection is not the same as a financial plan. A financial projection forecasts future revenue and expenses, estimating how much money the company may make or spend. A financial plan is broader; it outlines the business's financial goals and how to achieve them, including savings, investments and budgeting.

Q. Are Financial Forecasts and Financial Projections the Same?

No, though often used interchangeably, financial forecasts and financial projections are not the same. A financial forecast predicts the financial outcomes in the near future based on current conditions and expected short-term trends. In comparison, a financial projection is a calculation that shows what could happen if the business performs in a certain way.

In other words, a forecast is based on current conditions, whereas projections are based on potential scenarios.

Plan, Report & Strategize Finances with Visme

A financial projection is like a weather forecast but for your business! It's your best guess of how much money your business will make (revenues), how much it will spend (expenses), and what will be left after paying everything off (profits) in the future.

Creating financial projections is always challenging and time-consuming. But it's worth the effort to create a financial projection to help you make better decisions about your business.

With Visme, crafting financial projections becomes straightforward. All you need is your financial data, a Visme account, and a few minutes. You can use the financial projection templates provided in this article as a starting point and customize them using Visme’s advanced tools.

Besides financial documents, Visme also helps create various documents for different teams, such as marketing , human resources , training and development , and others. This way, Visme ensures you have all the documents you need to run and grow your business successfully.

Sign up for Visme today and take your financial projections to the next level.

Create beautiful and insightful financial reports with Visme

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About the Author

Raja Antony Mandal is a Content Writer at Visme. He can quickly adapt to different writing styles, possess strong research skills, and know SEO fundamentals. Raja wants to share valuable information with his audience by telling captivating stories in his articles. He wants to travel and party a lot on the weekends, but his guitar, drum set, and volleyball court don’t let him.

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How to Write a Business Plan Financial Projection [Sample Template]

How do you prepare a business plan financial statement? Do you need help developing business plan financial projections? Do you need a business plan projections template? Then i advice you read on because this article is for you.

What is a Business Plan Financial Statement?

The financial statement is a distinct section of your business plan because it outlines your financial projections. A business lives and dies based on its financial feasibility and most importantly its profitability. Regardless of how hard you work or how much you have invested of your time and money, people, at the end of the day, only want to support something that can return their investments with profits.

Your executive summary may be brilliantly crafted, and your market or industry analysis may be the bomb. But your business plan isn’t just complete without a financial statement to justify it with good figures on the bottom line.

Your financial statement is what makes or mars your chances of obtaining a bank loan or attracting investors to your business. Even if you don’t need financing from a third party, compiling a financial statement will help you steer your business to success. So, before we dig further into how to prepare a financial statement, you need to understand what a financial statement is not.

What’s the Difference Between a Financial Projection Statement and Accounting Statement?

However, you need to keep in mind that the financial statement is not the same as an accounting statement. Granted, a financial statement includes financial projections such as profit and loss, balance sheets, and cash flow, all of which makes it look similar to an accounting statement.

But the major difference between them is that an accounting statement deals with the past, while the financial projections statement of your business plan outlines your future spending and earnings. Having made this point clear, let’s now look at the steps involved on preparing a financial statement for your business plan.

So what exactly do you have to include in this section? You will need to include three statements:

• Income Statement
• Balance Sheet
• Cash-Flow Statement

Now, let’s briefly discuss each.

Components of a Business Plan Financial Statement

Income statement.

This beautiful composition of numbers tells the reader what exactly your sources of revenue are and which expenses you spent your money on to arrive at the bottom line. Essentially, for a given time period, the income statement states the profit or loss ( revenue-expenses ) that you made.

Balance sheet

The key word here is “ balance, ” but you are probably wondering what exactly needs to be weighed, right? On one side you should list all your assets ( what you own ) and on the other side, all your liabilities ( what you owe ), thereby giving a snapshot of your net worth ( assets – liabilities = equity ).

Cash flow statement

This statement is similar to your income statement with one important difference; it takes into account just when revenues are actually collected and when expenses are paid. When the cash you have coming in ( collected revenue ) is greater than the cash you have going out ( disbursements ), your cash flow is said to be positive.

And when the opposite scenario is true, your cash flow is negative. Ideally, your cash flow statement will allow you to recognize where cash is low, when you might have a surplus, and how to be on top of your game when operating in an uncertain environment.

How to Prepare a Business Plan Financial Projections Statement

1. Start by preparing a revenue forecast and a forecast profit and loss statement

Also, prepare supporting schedules with detailed information about your projected personnel and marketing costs. If your business has few fixed assets or it’s just a cash business without significant receivables, you don’t need a forecast balance sheet.

2. Using your planned revenue model, prepare a spreadsheet

Set the key variables in such a way that they can be easily changed as your calculations chain through. To ensure that your projected revenues are realistic and attainable, run your draft through a number of iterations. For each year covered in your business plan, prepare a monthly forecast of revenues and spending.

3. If you plan to sell any goods, then include a forecast of goods sold

This applies the most to manufacturing businesses. Give a reasonable estimate for this cost. And be of the assumption that the efficiency of your products would increase with time and the cost of goods sold as a percentage of sales will decline.

4. Quantify your marketing plan

Look at each marketing strategy you outlined in the business plan and attach specific costs to each of them. That is, if you are looking at billboard advertising, TV advertising, and online marketing methods such as pay-per-click advertising and so on; then you should estimate the cost of each medium and have it documented.

5. Forecast the cost of running the business, including general and administrative costs

Also, forecast the cost of utilities, rents, and other recurring costs. Don’t leave out any category of expenses that is required to run your business. And don’t forget the cost of professional services such as accounting and legal services.

6. In the form of a spreadsheet, forecast the payroll

This outlines each individual that you plan to hire, the month they will start work, and their salary. Also include the percentage salary increases (due to increased cost of living and as reward for exemplary performance) that will come in the second and subsequent years of the forecast.

Additional tips for Writing a Business Plan Financial Statement

• Don’t stuff your pages with lots of information, and avoid large chunks of text. Also, use a font size that is large enough. Even if these would spread out your statement into more pages, don’t hesitate to spread it out. Legibility matters!
• After completing the spreadsheets in the financial statement, you should summarize the figures in the narrative section of your business plan.
• Put a table near the front of your financial statement that shows projected figures, pre-tax profit, and expenses. These are the figures you want the reader to remember. You can help the reader retain these figures in memory by including a bar chart of these figures, too.

As a final note, you should keep in mind that a financial statement is just an informed guess of what will likely happen in the future. In reality, the actual results you will achieve will vary. In fact, this difference may be very far from what you have forecast.

So, if your business is a start-up, prepare more capital than your projections show that you will need. Entrepreneurs have a natural tendency to project a faster revenue growth than what is realistic. So, don’t let this instinct fool you.

More on Business Plans

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Home > Financial Projections > How to Make Financial Projections

How to Make Financial Projections

This is a series of posts setting out how to make financial projections for a business plan. Accordingly this post will act as a general index and be a place to reference all the posts in the series.

Financial Projections Template

When using the template, simply amend the highlighted input elements to suit your purposes, and the template does the rest.

Outline Task List – How to Make Financial Projections

We have set out below a handy reference task list showing how to make financials for a business plan using the free business plan financial projections template, follow the links for further details and information. If you’re not yet sure whether your business idea is viable, it might be worth carrying out a break even analysis before preparing a full financial business plan.

Income Statements

• Estimate revenue
• Calculate or estimate your gross margin.
• Estimate operating expenses
• Decide on the depreciation rate
• Find the interest rate
• Find the tax rate

In summary the Income Statement shows:

Balance sheets

• Estimate start up expenses
• Estimate start up assets
• Estimate startup capital (equity)
• Calculate start up debt finance required

Opening Balance Sheet

• Enter fixed assets opening balance
• Enter cash opening balance
• Enter opening accounts receivable
• Enter opening inventory
• Enter opening accounts payable
• Enter opening other liabilities balance
• Enter opening debt
• Enter the opening debt payment term
• Enter opening capital

Projected Balance Sheets

• Determine days sales outstanding
• Determine inventory days
• Determine days payable outstanding
• Determine other liabilities days outstanding

To summarize the balance sheet shows:

Cash flow Statements

• Estimate capital expenditure
• Estimate new debt
• Enter the new debt payment term
• Estimate new equity capital

Financial Model Reality Check

It is important to realize that it is unlikely that the first draft from the financial projections template will be perfect. Consequently review the financial model output and make changes to see how they affect the projections. Repeat the process until the income statements, balance sheets, and cash flow statements represent your proposed business plan activity, and the financial model behaves and responds in the way you expected it to.

How to make Financial Projections Conclusion

When considering how to make financial projections remember that you should include all 3 financial statements , income statement, balance sheet and cash flow statement including details of any financing arrangements. The template will ensure that the projections add up, but its important to understand how the financial statements inter-relate.

In conclusion try to keep the business model and projections simple, remember less is more. Additionally do not over complicate the projections with extra lines or too many scenarios . Provide reasonable projections which you can justify, do not be too aggressive or over-optimistic when preparing them, particularly the revenue projections.

As has been noted the post is one of a series covering the process of how to do financial projections for a business plan to start your business. Consequently this post will act as a general index and be a place to reference all the posts in the series.

About the Author

Chartered accountant Michael Brown is the founder and CEO of Plan Projections. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.

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How to Write a Business Plan Financial Projection [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans

The financial statement is a distinct section of your business plan because it outlines your financial projections. A business lives and dies based on its financial feasibility and most importantly its profitability. Regardless of how hard you work or how much you have invested of your time and money, people, at the end of the day, only want to support something that can return their investments with profits.

Your executive summary may be brilliantly crafted, and your market or industry analysis may be the bomb. But your business plan isn’t just complete without a financial statement to justify it with good figures on the bottom line.

Your financial statement is what makes or mars your chances of obtaining a bank loan or attracting investors to your business.

Even if you don’t need financing from a third party, compiling a financial statement will help you steer your business to success. So, before we dig further into how to prepare a financial statement, you need to understand what a financial statement is not.

What’s the Difference Between a Financial Projection Statement and Accounting Statement?

However, you need to keep in mind that the financial statement is not the same as an accounting statement. Granted, a financial statement includes financial projections such as profit and loss, balance sheets, and cash flow, all of which makes it look similar to an accounting statement.

But the major difference between them is that an accounting statement deals with the past, while the financial projections statement of your business plan outlines your future spending and earnings. Having made this point clear, let’s now look at the steps involved on preparing a financial statement for your business plan.

So what exactly do you have to include in this section? You will need to include three statements:

• Income Statement
• Balance Sheet
• Cash-Flow Statement

Now, let’s briefly discuss each.

Components of a Business Plan Financial Statement

Income statement.

This beautiful composition of numbers tells the reader what exactly your sources of revenue are and which expenses you spent your money on to arrive at the bottom line. Essentially, for a given time period, the income statement states the profit or loss ( revenue-expenses ) that you made.

Balance sheet

The key word here is “ balance, ” but you are probably wondering what exactly needs to be weighed, right? On one side you should list all your assets ( what you own ) and on the other side, all your liabilities ( what you owe ), thereby giving a snapshot of your net worth ( assets – liabilities = equity ).

Cash flow statement

This statement is similar to your income statement with one important difference; it takes into account just when revenues are actually collected and when expenses are paid. When the cash you have coming in ( collected revenue ) is greater than the cash you have going out ( disbursements ), your cash flow is said to be positive.

And when the opposite scenario is true, your cash flow is negative. Ideally, your cash flow statement will allow you to recognize where cash is low, when you might have a surplus, and how to be on top of your game when operating in an uncertain environment.

How to Prepare a Business Plan Financial Projections Statement

1. start by preparing a revenue forecast and a forecast profit and loss statement.

Also, prepare supporting schedules with detailed information about your projected personnel and marketing costs. If your business has few fixed assets or it’s just a cash business without significant receivables, you don’t need a forecast balance sheet.

2. Using your planned revenue model, prepare a spreadsheet

Set the key variables in such a way that they can be easily changed as your calculations chain through. To ensure that your projected revenues are realistic and attainable, run your draft through a number of iterations. For each year covered in your business plan, prepare a monthly forecast of revenues and spending.

3. If you plan to sell any goods, then include a forecast of goods sold

This applies the most to manufacturing businesses. Give a reasonable estimate for this cost. And be of the assumption that the efficiency of your products would increase with time and the cost of goods sold as a percentage of sales will decline.

4. Quantify your marketing plan

Look at each marketing strategy you outlined in the business plan and attach specific costs to each of them. That is, if you are looking at billboard advertising, TV advertising, and online marketing methods such as pay-per-click advertising and so on; then you should estimate the cost of each medium and have it documented.

5. Forecast the cost of running the business, including general and administrative costs

Also, forecast the cost of utilities, rents, and other recurring costs. Don’t leave out any category of expenses that is required to run your business. And don’t forget the cost of professional services such as accounting and legal services.

6. In the form of a spreadsheet, forecast the payroll

This outlines each individual that you plan to hire, the month they will start work, and their salary. Also include the percentage salary increases (due to increased cost of living and as reward for exemplary performance) that will come in the second and subsequent years of the forecast.

Additional tips for Writing a Business Plan Financial Statement

• Don’t stuff your pages with lots of information, and avoid large chunks of text. Also, use a font size that is large enough. Even if these would spread out your statement into more pages, don’t hesitate to spread it out. Legibility matters!
• After completing the spreadsheets in the financial statement, you should summarize the figures in the narrative section of your business plan.
• Put a table near the front of your financial statement that shows projected figures, pre-tax profit, and expenses. These are the figures you want the reader to remember. You can help the reader retain these figures in memory by including a bar chart of these figures, too.

As a final note, you should keep in mind that a financial statement is just an informed guess of what will likely happen in the future. In reality, the actual results you will achieve will vary. In fact, this difference may be very far from what you have forecast.

So, if your business is a start-up, prepare more capital than your projections show that you will need. Entrepreneurs have a natural tendency to project a faster revenue growth than what is realistic. So, don’t let this instinct fool you.

Related Posts:

• How to Write a Business Plan Mission and Vision Statement [Sample Template]
• Writing a Business Plan Yourself Vs Using a Software – Which is the Best?
• Hiring a Business Consultant Vs Using Business Plan Software
• 22 Tips on How to Start a Business Plan Proposal Presentation
• How Long Does It Take to Write a Business Plan?

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Top 11 Excel Finance Templates and Financial Statements for 2023

by Hady ElHady | Mar 13, 2024

Excel templates and financial models are powerful tools for budgeting and planning. With Excel, you can create a personal budget that helps you track your spending, plan ahead for future expenses and investments, and monitor your overall financial health.

You can also use Excel to build more complex financial models that help with forecasting, decision-making, investment analysis, and more. Whatever your financial goals, Excel provides the templates and tools to help you achieve them.

With Excel templates for budgets, financial statements, forecasting models, investment analysis, and more, Excel gives you the power to make informed decisions about your money.

Excel is easy to use and can be used by anyone, from novice users to experienced financial professionals. It is the premier tool for creating accurate budgets, forecasting future trends, and investing wisely.

So without further ado, here is a list of the top 11 Excel Finance Templates and Financial Models to help you manage your business financials, monitor performance, and make smarter business decisions.

1. Business Case Template

Download the Business Case Excel Template for Free

A Business Case Excel Template is a spreadsheet that can be used to make business decisions. It helps you organize and analyze data in order to help you reach the best possible outcome for your project or venture.

The template typically includes excel columns for data such as cost-benefit analysis, risk assessment, financials, resource breakdowns, and more. By using the Excel template, you can quickly identify areas of potential savings or risks before making final investment decisions on any business venture.

Additionally, this type of Excel template makes it easier to track progress throughout the project lifecycle and compare results against expectations. With an Excel template, you will have an effective tool for assessing costs and benefits when making important business decisions.

Download the Business Case Excel Template for Free.

2. Profit and Loss (P&L) Statement Template

Download the Profit and Loss (P&L) Statement Excel Template for Free

A Profit and Loss (P&L) Statement Excel Template is a spreadsheet tool designed to help you organize and track your business’s income and expenses each month. This template makes it easy to quickly generate an accurate Profit & Loss statement, which can be used for both internal records as well as external reporting.

The Excel template includes columns for entering revenue and cost of goods sold, as well as expenses such as wages and rent. At the end of each month, it is possible to generate a snapshot of your business’s performance for that month.

With this data, you can make better-informed decisions about how to maximize your profits and minimize losses. Using a P&L excel template also helps ensure accuracy in financial reporting. The Excel template is easy to use and can be customized to meet your specific needs. With this tool, you can identify areas of growth and focus on improving them for the future success of your business.

Download the Profit and Loss (P&L) Statement Excel Template for Free.

3. Unit Economics Template

Download the Unit Economics Excel Template for Free

A Unit Economics Excel Template is an Excel-based document that provides a framework for analyzing the financial performance of each unit within a business. The template enables users to input key metrics such as revenue, cost, and margin per unit to generate comprehensive insights into the performance of their business model.

By leveraging the power of Excel and data visualization, users can gain valuable insight into their business’s efficiency, profitability, and sustainability. The Excel template also serves as a powerful tool for tracking changes in unit economics over time and comparing different scenarios side by side.

With this information at hand, businesses are able to make informed decisions regarding pricing strategies, product development initiatives, marketing campaigns, and more. A Unit Economics Excel Template is an invaluable asset for any company looking to maximize its profits and excel in the market.

Download the Unit Economics Excel Template for Free.

4. Headcount and Workforce Planning Template

Download the Headcount and Workforce Planning Excel Template for Free

A Headcount and Workforce Planning Template is a customizable Excel template that helps businesses manage their workforce. It is designed to track the current headcount, average hours worked, and employee costs. The template also allows users to plan future staffing needs by setting estimated headcount goals for each quarter or year.

With the help of this Excel template, business owners can make more efficient decisions when planning their budget and personnel resources. The Excel template includes features such as forecasting total labor cost in relation to other operating expenses, tracking changes in employee count over time, and providing graphical visualizations of staffing trends.

This Excel template enables businesses to quickly forecast the size of their workforce based on demand projections for the upcoming fiscal period. It is an invaluable tool for determining your company’s future workforce needs and budgeting accordingly.

Using a Headcount and Workforce Planning template helps businesses save time, money, and resources by giving them an easy-to-use method for tracking changes in headcount over time. The Excel template also serves as a valuable resource for business owners to gain insight into their staff’s productivity, performance, and cost-effectiveness. With the help of this Excel template, businesses can easily plan their workforce needs and make better-informed staffing decisions.

Download the Headcount and Workforce Planning Excel Template for Free.

5. Runway and Cash Budget Template

Download the Runway and Cash Budget Excel Template for Free

A Runway and Cash Budget Template is an Excel spreadsheet that helps businesses plan ahead by budgeting for their anticipated expenses. It outlines what money will be coming in and going out over a certain period of time, allowing users to adjust and balance their budget accordingly.

The template also provides projections on how much cash the business can expect to have available at any given point during the forecasted period, helping them make informed decisions about when it’s best to purchase assets or hire new staff. Using an Excel template simplifies the process of creating a runway and cash budget, as all of the information can be managed in one place.

It also makes it easy to make changes and tweak different variables, so businesses can always stay up-to-date with their finances. With a Runway and Cash Budget Template, businesses can gain greater insight into their financial situation and make sure that they are always prepared for the future.

Download the Runway and Cash Budget Excel Template for Free.

6. Balance Sheet Template

Download the Balance Sheet Excel Template for Free

A Balance Sheet Excel Template is a type of spreadsheet that allows users to create, maintain and analyze their financial information. This template provides a comprehensive overview of an individual’s or company’s financial status at any given point in time. It includes detailed lists of liabilities, assets, and equity accounts which are used to calculate the net worth at any point in time.

By using this template, it will be easier for individuals and businesses to track their financial performance as well as identify potential areas for improvement. With this template, users can also view their overall financial health over time, allowing them to make informed decisions.

Balance Sheets are generally prepared on an annual or quarterly basis, giving accurate insights into your current financial position. They help you to identify areas that require further attention and make informed decisions about your financial future.

Download the Balance Sheet Excel Template for Free.

Top Free Google Sheets Templates for 2023

Top Free Google Sheets Templates and Financial Statements to help you manage your business financials, monitor performance, and make informed decisions.

7. Revenue Forecasting Template

Download the Revenue Forecasting Excel Template for Free

A Revenue Forecasting Excel Template is a spreadsheet that helps businesses estimate their potential revenues for the upcoming months. It allows companies to quickly make projections about how much money they can expect to generate in the future and plan accordingly. The template usually includes fields for entering past sales figures, projecting cash flows based on historical performance, forecasting seasonality effects, and making other predictions. It can help companies get an accurate picture of their expected revenues, enabling them to optimize their business operations and make better decisions.

Having a reliable revenue forecasting template can help businesses reach their goals faster and with more efficiency. With the right Revenue Forecasting Excel Template, businesses can improve their monthly or yearly performance without having to hire an expensive consultant. It’s a valuable tool for any business, big or small.

Using the template is easy – simply enter your historical data, and it will generate an estimated revenue projection for you. With this information, you can plan better and make sure that your business operates at peak efficiency. The template also helps identify potential areas for improvement, giving you insights into how your business can become more efficient and profitable.

Overall, a Revenue Forecasting Excel Template is an invaluable tool for any business that is looking to maximize its profits and make the most of its resources. It provides valuable insights into future cash flows and helps businesses make better decisions about their operations.

Download the Revenue Forecasting Excel Template for Free.

8. Sales Compensation Plan Template

Download the Sales Compensation Plan Excel Template for Free

A Sales Compensation Plan Excel Template is an easy-to-use tool that can help you track and manage your sales compensation plan. It allows business owners to quickly create a comprehensive document outlining the different commission structures applicable to their sales team.

The template offers customizable features such as dynamic columns for data entry and Excel formulas for calculating total payouts, so you can easily manage your compensation plans and make sure everyone gets paid accurately. With a template, you will have all the information at hand when it comes to setting up a successful sales compensation plan. It can be useful in helping to streamline the process of managing sales commissions and tracking employee performance more efficiently.

Additionally, with this template, you’ll be able to understand exactly how each employee is performing, enabling you to make better decisions on their compensation plans. You will have a comprehensive overview of your sales team’s performance and be able to ensure that everyone is paid fairly and accurately.

With a Sales Compensation Plan Excel Template, you can easily manage the different commission structures for each employee, allowing you to make the most out of your team’s performance.

Download the Sales Compensation Plan Excel Template for Free.

9. E-commerce Demand Forecasting Template

Download the E-commerce Demand Forecasting Excel Template for Free

An e-commerce demand forecasting Excel template is a spreadsheet tool that helps businesses predict future customer demand for particular products or services. It uses detailed data analysis and predictive analytics, such as historical sales figures, market trends, and competitor performance, to generate forecasts.

The template contains various tools and functions that enable users to easily customize the model according to their own organizational needs and objectives. With this information, businesses can adjust marketing strategies accordingly and make informed decisions on how best to allocate resources.

Additionally, an e-commerce demand forecasting Excel template can be used to analyze current market conditions in order to better understand customer behavior and what drives purchases in certain markets or locations. By understanding these dynamics, businesses are able to design more effective campaigns that will result in higher sales and increased customer loyalty.

Ultimately, an e-commerce demand forecasting Excel template helps businesses make informed decisions about their future products, services, and strategies. With accurate and up-to-date data, they can better plan for customer demand and ensure their continued success in the e-commerce industry.

Download the E-commerce Demand Forecasting Excel Template for Free.

10. Operating Budget Template

Download the Operating Budget Excel Template for Free

An operating budget Excel template is an easy-to-use spreadsheet that helps you create a detailed plan for managing your business finances. It outlines expected income, expenses, and savings over a period of time. This type of budgeting tool allows you to analyze your current financial position and plan for the future. With the help of a template, it’s easier to identify areas for improvement and make changes to reduce costs or increase revenue.

An operating budget also helps you determine if there are any gaps in your cash flow and create strategies to address them. By having an accurate picture of what’s coming in and going out each month, you can make better decisions about how to manage your money. Having an operating budget Excel template handy will give you greater peace of mind and help you manage your finances with confidence.

This type of budget template helps to keep track of all the necessary information like income, expenses, and project costs. It also provides you with easy-to-understand charts and graphs that help to visualize your financial data. With an operating budget Excel template, you can quickly and accurately analyze your financial data and make informed decisions about your finances.

It’s also a great way to stay organized and on top of your business finances. With the help of an operating budget Excel template, you can easily monitor trends in your finances and create strategies to maximize returns and minimize costs. By taking advantage of an operating budget Excel template, you can ensure that your business is on a sound financial footing and reducing risk.

Download the Operating Budget Excel Template for Free.

11. Capitalization Table Template

Download the Capitalization Table Excel Template for Free

A Capitalization Table Excel Template is a useful tool for startups and early-stage companies. It helps you keep track of the company’s equity ownership structure and value, as well as any changes that occur over time. It can also be used to compare different financing scenarios, determine optimal terms and negotiate with investors.

The template typically consists of an Excel spreadsheet that contains columns detailing the names of shareholders, their ownership percentages, the overall percentage ownership of all shareholders combined, the total number of shares outstanding, convertible notes or preferred stock details, and liquidation preferences. This information allows business owners to make more informed decisions regarding their capital structure and investment opportunities.

By using a Capitalization Table Excel Template, entrepreneurs can easily assess the financial position of their business and make decisions that are informed by the current financial structure. It’s also a great way to keep track of events that could potentially affect their company’s value, such as a major acquisition or the release of new products. This tool can help entrepreneurs make sure their company is on the right track for continued growth.

Overall, a Capitalization Table Excel Template provides entrepreneurs with an easy and convenient way to track and manage their company’s equity value, ownership structure, and financing options. By utilizing this powerful tool, entrepreneurs can gain a better understanding of their company’s financial position and make more informed decisions.

Download the Capitalization Table Excel Template for Free.

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“How to Start a Successful Online Business: A Step-by-Step Guide” In today’s digital age, starting an online business has never been easier. With the rise of e-commerce platforms, social media marketing, and digital advertising, entrepreneurs have a wealth of tools at their disposal to launch and grow a successful online business. Whether you’re looking to start a side hustle or turn your passion into a full-time business, this step-by-step guide will help you navigate the process and set you on the path to success. Step 1: Identify Your Niche and Target Audience The first step in starting a successful online business is to identify your niche and target audience. Your niche is the specific area of expertise or interest that your business will focus on. This could be anything from fashion to fitness to digital marketing. By choosing a niche that you are passionate about and knowledgeable in, you will be better equipped to create valuable content and products for your target audience. Speaking of your target audience, it’s important to understand who they are and what they are looking for. Conduct market research to identify the demographics, interests, and pain points of your target audience. This will help you tailor your products and marketing strategies to meet their needs and stand out in a crowded online marketplace. Step 2: Validate Your Business Idea Before investing time and money into launching your online business, it’s crucial to validate your business idea. This involves testing the market demand for your products or services and ensuring that there is a viable opportunity for success. You can validate your business idea by conducting surveys, running focus groups, and analyzing competitor offerings. Additionally, consider creating a minimum viable product (MVP) to test the market response to your idea. This could be a simple landing page, a prototype of your product, or a sample of your service. By collecting feedback and data from potential customers, you can refine your business idea and ensure that there is a demand for what you are offering. Step 3: Create a Business Plan Once you have validated your business idea, it’s time to create a comprehensive business plan. A business plan serves as a roadmap for your online business and outlines your goals, strategies, and financial projections. It should include information about your target market, competition, marketing plan, sales strategy, and budget. Your business plan should also outline your unique selling proposition (USP) – what sets your business apart from competitors and why customers should choose your products or services. By clearly defining your USP, you can differentiate your brand in the marketplace and attract loyal customers. Step 4: Choose a Business Model There are several different business models that you can choose from when starting an online business. The most common ones include: – E-commerce: Selling physical or digital products through an online store. – Dropshipping: Partnering with suppliers to sell products without holding inventory. – Subscription: Offering products or services on a recurring basis for a monthly fee. – Affiliate marketing: Promoting other companies’ products and earning a commission on sales. Consider your niche, target audience, and business goals when choosing a business model. Each model has its own advantages and challenges, so it’s important to select the one that aligns best with your vision for your online business. Step 5: Build Your Online Presence With your business plan and business model in place, it’s time to build your online presence. This includes creating a professional website, setting up social media profiles, and optimizing your online content for search engines. Your website is your online storefront and should reflect your brand identity, values, and offerings. When building your website, consider the user experience (UX) and design elements that will attract and engage visitors. Make sure your website is mobile-friendly, easy to navigate, and optimized for fast loading speeds. Additionally, create high-quality content that showcases your expertise and provides value to your target audience. Step 6: Implement a Marketing Strategy No online business can succeed without a solid marketing strategy. Your marketing strategy should include a mix of digital marketing tactics, such as search engine optimization (SEO), social media marketing, email marketing, and pay-per-click (PPC) advertising. These tactics will help you attract and retain customers, drive website traffic, and increase brand awareness. SEO is particularly important for online businesses, as it helps your website rank higher in search engine results and drive organic traffic. Conduct keyword research to identify relevant keywords for your niche, optimize your website content for those keywords, and build high-quality backlinks to improve your search engine rankings. Step 7: Monitor and Measure Your Results Once your online business is up and running, it’s important to monitor and measure your results to track your progress and make data-driven decisions. Use analytics tools like Google Analytics to track website traffic, user behavior, and conversions. Monitor your sales, revenue, and expenses to ensure that you are meeting your financial goals. Additionally, seek feedback from customers through surveys, reviews, and social media interactions. Use this feedback to improve your products, services, and customer experience. By continuously monitoring and measuring your results, you can identify areas for improvement and optimize your online business for success. In conclusion, starting a successful online business requires careful planning, strategic thinking, and ongoing effort. By following this step-by-step guide, you can set yourself up for success and build a profitable online business that fulfills your entrepreneurial dreams. Remember to stay focused on your niche, target audience, and business goals, and never stop learning and adapting to the ever-changing digital landscape. With dedication, perseverance, and a solid strategy, you can turn your online business idea into a thriving reality.

If you’ve ever tried to import photos or videos from Instagram to Telegram, you may have noticed that the description comes with all the hashtags included in the original Instagram post. But what if you want to remove those hashtags and just keep the text description? That’s where the “Text parser (Replace)” module comes in handy. However, setting it up correctly can be a bit tricky if you’re not familiar with how it works.

In a recent update, a user shared their solution to this problem in the comments section. By using a specific code snippet, they were able to remove hashtags from the Instagram post and retain only the text description. This code snippet effectively filters out any hashtags that may have been included in the original post, leaving you with a clean and hashtag-free text description.

If you’re facing the same issue and want to remove hashtags from your Instagram posts when importing them to Telegram, this code snippet could be the solution you’ve been looking for. By implementing this solution, you can ensure that only the text description is transferred, without any unwanted hashtags cluttering up your post.

So, next time you’re importing photos or videos from Instagram to Telegram and want to clean up the post by removing hashtags, remember to give this code snippet a try. It’s a simple yet effective way to ensure that your posts look clean and professional, without any unnecessary hashtags getting in the way.

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Instagram is a popular social media platform for sharing photos and videos, and Telegram is a messaging app that allows users to import content from Instagram. However, when importing content from Instagram to Telegram, the description of the post is also transferred, including any hashtags that may be included in the original Instagram post.

How can you remove hashtags from Instagram posts when importing them to Telegram?

One way to remove hashtags from Instagram posts when importing them to Telegram is by using the “Text parser (Replace)” module. This module allows you to set up rules for replacing specific text patterns with other text. In this case, you can set up a rule to remove hashtags from the Instagram post before it is imported to Telegram.

To set up the “Text parser (Replace)” module, you will need to create a new rule that targets hashtags in the Instagram post. You can use regular expressions to identify hashtags in the text and replace them with an empty string.

What is a regular expression for removing hashtags from Instagram posts?

A regular expression that can be used to remove hashtags from Instagram posts is `\B#([A-Za-z0-9]2,)(?![~!@#$%^&*()=+_`\-|/’\[\]\\]|[?.,]*\w)`. This regular expression targets hashtags that are followed by at least two alphanumeric characters and are not followed by any special characters or punctuation marks.

What are the steps to remove hashtags from Instagram posts using the “Text parser (Replace)” module?

1. Open the “Text parser (Replace)” module in your Telegram settings. 2. Create a new rule by clicking on the “Add Rule” button. 3. Enter the regular expression `\B#([A-Za-z0-9]2,)(?![~!@#$%^&*()=+_`\-|/’\[\]\\]|[?.,]*\w)` in the “Search for” field. 4. Leave the “Replace with” field empty to remove the hashtags from the Instagram post. 5. Save the rule and apply it to the Instagram posts that you want to import to Telegram.

By following these steps, you can effectively remove hashtags from Instagram posts when importing them to Telegram. This will allow you to share the text description of the post without any distracting hashtags.

In conclusion, the “Text parser (Replace)” module can be a useful tool for customizing the content that is imported from Instagram to Telegram. By setting up rules to remove hashtags or other unwanted text, you can ensure that the imported posts are clean and concise. So, next time you import photos or videos from Instagram to Telegram, remember to use the “Text parser (Replace)” module to remove hashtags and leave only the text description.

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Home >> #realtalk Blog >> Manage a business >> How to Start a Cafe …

How to Start a Cafe on a Budget

By Homebase Team

Thinking about starting a cafe but worried about the costs? You’re not alone. Many aspiring cafe owners face the same challenge.

Understanding the typical costs can help you plan better. Let’s break down what you can expect.

Here’s a straightforward look at the average startup costs for a small cafe.

What is the Typical Cost to Start a Cafe?

Starting a small cafe typically requires an investment ranging from $80,000 to $250,000. This wide range accounts for various factors such as location, size, concept, and equipment.

Location plays a significant role in determining costs. A prime spot in a bustling city will cost more than a quieter neighborhood. The size of your cafe also impacts expenses. A larger space means higher rent and more furnishings.

Your concept will dictate the type of equipment you need. An espresso machine, grinders, refrigerators, and other essentials can add up quickly. Don’t forget the smallwares like cups, plates, and utensils, which are necessary for daily operations.

Labor costs are another major expense. You’ll need to budget for wages for baristas, managers, and cooks. Training new employees also adds to the initial costs.

Rent, equipment, supplies, and labor are the primary expenses when starting a cafe. Understanding these costs can help you create a realistic budget and plan accordingly. For a detailed guide, check out our comprehensive steps on starting a coffee shop .

Factors That Impact Cafe Startup Costs

Starting a cafe is a dream, but it’s also a significant financial commitment. Knowing what factors drive up costs can help you make smarter decisions and avoid surprises.

Location and Real Estate Costs

The location of your cafe significantly affects your startup costs. Rent or purchase price for the cafe space varies widely depending on the city, neighborhood, and square footage. Urban areas with high foot traffic command higher rents, while suburban or rural locations may offer more affordable options. The size of the space also matters; larger spaces cost more but allow for more seating and amenities. Consider the visibility and accessibility of the location, as these factors can influence customer traffic and, ultimately, your revenue.

Equipment and Supplies

Outfitting your cafe with the right equipment and supplies is another major expense. Essential items include espresso machines, grinders, and refrigerators. High-quality machines ensure consistent coffee quality and efficiency but come with a hefty price tag. Additionally, you’ll need smallwares like cups, plates, and utensils, which add up quickly. Furniture and decor also play a role in creating the desired ambiance for your cafe. Comfortable seating and attractive decor can enhance the customer experience but will increase your initial investment.

Labor and Training

Labor costs represent a significant portion of your ongoing expenses. You’ll need to budget for wages for baristas, managers, and cooks. Competitive wages help attract and retain skilled employees, which is vital for maintaining service quality. Training costs for new employees also add to your startup expenses. Proper training ensures that staff are well-prepared to deliver excellent service and handle the equipment efficiently. Investing in training from the start can reduce turnover and improve customer satisfaction. For more tips on hiring employees , explore our detailed guide.

Licenses and Permits

Operating a cafe requires several licenses and permits. You’ll need a business license to legally operate, which varies in cost based on your location. Health department permits are necessary to ensure your cafe meets local health and safety standards. These permits often require inspections and can incur additional fees. If you plan to renovate your space, building permits are required. These permits ensure that your renovations comply with local building codes and regulations. The cost of licenses and permits can add up, so it’s important to factor them into your budget early on. Learn more about the necessary business licenses to keep your cafe compliant.

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Ways to Reduce Cafe Startup Costs

Starting a cafe is expensive, but there are smart ways to cut costs without sacrificing quality. Here are some strategies to help you stretch your budget.

Start with a Small Footprint

Choosing a smaller location can significantly reduce your initial expenses. A smaller space means lower rent, which is one of the largest ongoing costs for any cafe. By opting for a compact location, you can save money that can be allocated to other critical areas of your business. Additionally, limiting the seating capacity reduces the need for extensive furniture, which can be costly. A cozy, intimate setting can also create a unique atmosphere that attracts customers.

Buy Used Equipment

Investing in gently used equipment can be a smart way to cut costs. Many cafes and restaurants sell their equipment when they close or upgrade, offering you the chance to purchase high-quality items at a fraction of the cost. Look for auctions or sales from closing establishments to find deals on espresso machines, grinders, and refrigerators. Leasing equipment is another option that allows you to conserve capital. Leasing can provide access to the latest technology without the hefty upfront investment, making it easier to manage your cash flow.

DIY Elements

Taking on the buildout and renovations yourself can save a substantial amount of money. If you have the skills, doing your own construction work can eliminate the need for expensive contractors. Even if you don’t have construction experience, you can still tackle smaller projects like painting or installing fixtures. Creating your own furniture and decor adds a personal touch to your cafe while keeping costs down. Simple, handmade tables and chairs can be both functional and charming, enhancing the overall aesthetic of your space.

Offering a focused menu helps reduce startup costs by minimizing the equipment and ingredients you need. A smaller menu means you won’t need a wide variety of specialized equipment, which can be expensive. It also simplifies inventory management and reduces waste. Focus on a few high-quality items that you can execute well. This approach not only saves money but also allows you to build a reputation for excellence in specific offerings. Customers appreciate a well-curated menu that highlights your strengths. For additional money management tips , check out our expert advice.

Create a Marketing Plan

Developing a marketing plan on a budget can help attract customers without breaking the bank. Utilize social media platforms to promote your cafe and engage with your community. Offer promotions and discounts to draw in new customers and encourage repeat visits. Collaborate with local businesses to cross-promote and expand your reach. A well-thought-out marketing plan can drive traffic to your cafe and boost your revenue without significant upfront costs.

Sample Budgets for Different Cafe Sizes

Breaking down the costs can help you plan better. Here are some sample budgets for cafes of different sizes.

Budget for a Small 500 sq ft Cafe

Starting with a small 500 sq ft cafe, you’ll need to consider several key expenses. Rent for a space this size typically runs around $2500 per month. This amount can vary depending on your location, but it’s a good baseline to start with.

Equipment costs for a small cafe will be around $15,000. This includes essential items like espresso machines, grinders, refrigerators, and other necessary appliances. Investing in quality equipment ensures smooth operations and consistent product quality.

Supplies are another important factor. Budget approximately $5000 for initial stock, including coffee beans, milk, syrups, cups, plates, and utensils. These supplies will need regular replenishment, but this initial amount will get you started.

Labor costs are significant, especially if you plan to hire baristas, managers, and possibly cooks. Expect to spend around $10,000 per month on wages. This figure includes salaries and any benefits you might offer to attract and retain good employees.

Overall, the total startup costs for a small 500 sq ft cafe come to about $50,000. This estimate covers the basics and allows you to open your doors and start serving customers.

Budget for a Mid-size 1000 sq ft Cafe

For a mid-size 1000 sq ft cafe, the expenses increase proportionally. Rent for this larger space will be around $4000 per month. Again, this can vary based on your specific location, but it’s a reasonable estimate for planning purposes.

Equipment costs double to about $30,000. With more space, you might need additional or larger equipment to handle a higher volume of customers. This includes more extensive coffee machines, additional grinders, and larger refrigerators.

Supplies for a mid-size cafe will also increase. Budget around $10,000 for initial stock. This includes a larger quantity of coffee beans, milk, syrups, and other consumables. You’ll also need more cups, plates, and utensils to accommodate more customers.

Labor costs rise to approximately $15,000 per month. With a larger space, you’ll likely need more staff to maintain service quality. This includes additional baristas, possibly more managers, and kitchen staff if you offer a broader menu.

The total startup costs for a mid-size 1000 sq ft cafe come to about $100,000. This budget covers the increased expenses associated with a larger space and higher customer volume. For more insights on the costs to open a cafe , explore our detailed breakdown.

Budget for a Large 2000 sq ft Cafe

A large 2000 sq ft cafe requires a more substantial investment. Rent for a space this size typically runs around $7000 per month. This figure can vary widely depending on the location, but it’s a good starting point for your budget.

Equipment costs for a large cafe will be around $50,000. You’ll need multiple espresso machines, grinders, and large-capacity refrigerators. Additional equipment might include ovens, dishwashers, and other appliances to support a full-service cafe.

Supplies for a large cafe will cost about $20,000 initially. This includes a significant stock of coffee beans, milk, syrups, and other consumables. You’ll also need a large quantity of cups, plates, utensils, and possibly more specialized items depending on your menu.

Labor costs for a large cafe are substantial, estimated at $25,000 per month. This budget includes wages for a larger team of baristas, multiple managers, cooks, and possibly other support staff. Ensuring you have enough staff to provide excellent service is crucial for a large operation.

The total startup costs for a large 2000 sq ft cafe come to about $200,000. This budget reflects the higher expenses associated with a larger space, more equipment, and a bigger team.

Financing Options for Your Cafe

The financial side of opening a cafe can be daunting, but there are several ways to secure the funds you need.

Personal Savings

Using your own money to start your cafe allows you to maintain full control over your business. You won’t have to answer to investors or lenders, and all profits remain yours. However, this approach requires a significant amount of savings. Assess your financial situation to ensure you have enough funds to cover startup costs and initial operating expenses without jeopardizing your personal financial stability.

Small Business Loans

Small business loans are a common way to finance a cafe. Banks and the Small Business Administration (SBA) offer loans specifically designed for small businesses. To secure a loan, you typically need a solid business plan and good credit. Your business plan should outline your concept, market analysis, financial projections, and how you plan to repay the loan. Good credit demonstrates your reliability to lenders, increasing your chances of approval. Be prepared to provide collateral or a personal guarantee to secure the loan. For more information on small business loans , explore our comprehensive guide.

Pitching your cafe concept to potential investors can provide the capital needed to get started. Investors can be individuals, venture capitalists, or angel investors interested in your business idea. In exchange for their investment, you will need to give up some equity and control. This means sharing profits and possibly having investors involved in decision-making processes. To attract investors, present a compelling business plan that highlights your unique value proposition, market potential, and growth strategy.

Crowdfunding

Crowdfunding allows you to raise small amounts of money from a large number of people. Platforms like Kickstarter, Indiegogo, and GoFundMe enable you to present your cafe concept to the public. In return for their contributions, offer rewards such as free coffee, branded merchandise, or exclusive event invitations. Crowdfunding not only provides funding but also helps build a community around your cafe before it even opens. Create a compelling campaign with clear goals, engaging visuals, and regular updates to keep backers informed and excited about your progress.

Small Business Grants

Exploring options for small business grants can provide additional funding without the need to repay. Grants are typically offered by government agencies, non-profits, and private organizations to support small businesses. Research available grants in your area and apply for those that align with your business goals.

How to Develop a Realistic Cafe Budget

Creating a realistic budget for your cafe starts with thorough research. Understand the costs specific to your location and concept. Different cities and neighborhoods have varying rent prices, and your cafe’s theme or concept will influence the type of equipment and decor you need.

Next, get quotes from equipment suppliers. Reach out to multiple vendors to compare prices on essential items like espresso machines, grinders, and refrigerators. This helps you find the best deals and avoid overspending.

Estimate labor costs based on your projected staffing needs. Calculate wages for baristas, managers, and any additional staff. Consider the number of employees required for different shifts and factor in training costs for new hires. For more guidance, check out our detailed coffee shop business plan guide.

Always add a buffer for unexpected expenses. Unforeseen costs can arise from equipment repairs, supply shortages, or regulatory changes. Including a contingency fund in your budget ensures you’re prepared for these surprises.

Determine how much startup capital you can realistically raise. Assess your personal savings, potential loans, and investment opportunities. Knowing your financial limits helps you plan more effectively.

Adjust your concept to fit your available budget. If funds are tight, consider scaling back on non-essential elements or starting with a smaller menu. Prioritize spending on items that directly impact your cafe’s operations and customer experience.

• What : Starting a small cafe costs $80,000 to $250,000.
• So What : Knowing costs helps in planning and budgeting.
• Pros & Cons : Pros: Unique experience, high returns; Cons: High costs, ongoing expenses.
• Bottom Line : Plan, budget, and explore financing options for success.

Ready to simplify your cafe’s employee management? Join us at Homebase to streamline scheduling, payroll, and communication. Let’s make work easier— get started today .

Remember:  This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

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