If you are inexperienced in preparing these statements, hire an accountant to help you. The Balance Sheetis important because it shows the company's financial position at a specific point in time, and it compares what you own to what you owe.
Your financial statements should show both a long- and short-term vision for your business.
If your business sells a product, your sales forecast should include the cost of goods sold. Your liabilities will include accounts payable, wages and salaries, taxes, rent and utilities, and loan balances. If you are starting a new business, project your balances per month, forward to one year.
Realize that the financial section is not the same as accounting. When they are considering doing so, they will be comparing the risk and return of working with you to the risk and return they could get from lending to or investing in other companies.
And then multiply your estimated debts balance times an estimated interest rate to estimate interest. If you are operating an existing business, you should have historical documents, such as profit and loss statements and balance sheets from years past to base these forecasts on.
They will also want to see that you have an exit strategy to cash out on your investment — and theirs. Hold an initial public offering and go public? When you put together your financial statements, make sure there are absolutely no typos or mistakes in your calculations.
Some of those are obvious and affect you at only the beginning, like startup assets. This information helps you determine how much financing your business needs and helps outsiders determine whether lending you money or investing in your business is a wise use of their funds.
You base this partly on your sales forecasts, balance sheet items, and other assumptions. Personnel Plan If your business will have employees and not just managers, you will need a Personnel Plan showing what types of employees you will have for example, cashiers, butchers, drivers, stockers and cooksalong with what they will cost in terms of salary and wages, health insuranceretirement-plan contributionsworkers compensation insuranceunemployment insuranceand Social Security and Medicare taxes.
Figure your cash flow. Proposed Repayment Schedule or Exit Strategy Potential lenders will want to know how and when you intend to repay the loan or line of credit, so you should put together a proposed repayment schedule and terms. So how, exactly, do you plan to use any money that lenders or investors offer you?How to make financials for a business plan Such legal and administrative, and forecasts that a plan should offer to attract investment, and business to business.
You want this percentage to be as low as possible, this section will be different depending on if you are an established business or a new startup. This quick guide offers tips that will help you create the financials section for your business plan.
Video Podcasts Start A Business Subscribe Books Project Grow. Business Plan Financials – Make the Numbers Support Your Story!
Make the financial section of your business plan look professional and persuasive! Use the business plan financials template and create your company’s financial plan for the next 5 years (projecting the first two years on a monthly basis).
The following is a general outline for creating business plan financials and is not meant to be a comprehensive account of the financial details you will need. The Income Statement. An income statement shows how much profit or loss you expect to have for the year.
For new businesses, income statements should be broken down monthly or quarterly. The SBA connects entrepreneurs with lenders and funding to help them plan, start and grow their business. We support America's small businesses. The SBA connects entrepreneurs with lenders and funding to help them plan, start and grow their business.
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.