summary of financial needs business plan example

Business Financial Plan

A business financial plan is a critical and crucial document for companies and different kinds of business establishments. Whether you are a small start-up or an established corporation, it is necessary for you to create a business financial plan as it can help you achieve your desired financial condition and other strategic objectives. The financial planning process will allow you to identify the key points of your financial needs as well as the ways on how you can let the organization realize its financial goals.

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Financial Plan Template

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Example Business Financial Plan Template

Micro Finance Business Plan Example

Financial Advisor Business Plan Example

Financial Plan for Start-Up Business Template

We listed a number of business financial plan templates and examples that you can use as document guides and references if you want to start creating your business’s own financial plan document. The examples available in this post can make it easier and faster for you to develop the format and discussion flow of your business plans .

Financial Plan Template Example

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Financial Planning Template Guideline Example

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Financial Planning for Small Businesses

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Importance of a Well-Formulated Business Financial Plan

A  financial adviser marketing plan  can help you select the best financial adviser that you can work with so that you can better the financial standing of your business. However, having a professional help you is not enough to maintain the efficiency and effectiveness of your financial actions. One of the documents that you can use to sustain your financial processes is a business financial plan. This document can also help you a lot if you want to grow as a business in terms of your finances. A few of the reasons why it is important for you to have a well-formulated business financial plan include the following:

• Having a business financial plan at hand can help your organization determine and focus on your financial goals may they be short-term or long-term. Being able to identify your objectives and goals can help you to balance and look into all the elements and factors that can affect your financial growth as a business. You may also see annual plans .
• Creating a business financial plan can promote communication between different business departments. This can ensure the management that all the stakeholders who are involved in the implementation of the business financial plan are fully aware of their tasks and obligations. Through this, ownership of responsibilities can be established.
• Developing a business financial plan can help you better manage your corporate finances. Some companies are not that sure where to start when it comes to financial planning. Having a business financial plan can help you have an easier time when dealing with the factors and elements that are needed to be put together so you can come up with strategies and tactics aligned with your financial vision and ability to execute call to actions. You may also see event budget examples .
• Making a business financial plan can give your business an idea about the expertise and skills that you need to look for when executing your financial plan. However, you have to remember that working with experts should not start in the processes of implementation as you need professional opinion and guidance from the very beginning of your financial planning undertaking. You may also see advertising plans .

Financial Business Plan and Budget Example

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Financial Plan Format Example

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Steps in Making a Business Financial Plan

Bridging the gap between your current financial condition and your financial aspiration can be overwhelming and intimidating. This is why you need to be well-guided in the implementation of your action plans that involve your finances and how you use them for your business operations. Here are the steps that you can follow when developing a simple and basic business financial plan:

• Create a team of professionals that can help you make a business financial plan appropriately. It is important for you to work with people who can add value to the planning processes of your finances. List down all the deliverable that are needed for the financial planning of your business so you can identify the people who are fit for the job.
• Identify your corporate goals. The  objectives of your business financial plan must be aligned with the things that you also would like to achieve as a business entity. Ensure that the vision of your business can be reflected in your business financial plan so that the successes of the document and its implementation can benefit the entire organization. You may also see  company plan examples .
• Assess the current financial condition of your business. This can help you identify the financial processes and decisions that can either positively or negatively impact your business. This will allow you to retain the activities that work to your advantage and remove the processes that can only ruin the financial sustainability of the business. You may also see strategic plan examples .
• List down your strengths so you can resort to them whenever needed. More so, present all the weak spots of your financial condition so you can work on them. Knowing your strengths and weaknesses can help your business financial plan to discuss the opportunities that you can take and the threats that you need to look into and prepare for. You may also see network marketing business plan examples .
• Put together all the business financial plans that you would like to realize based on your goals and objectives. Focus on the concerns that you would like to address and the plan of actions that you want to execute for the betterment of the business. Create call to actions that can be achieved with the help of your workforce and other stakeholders. You may also see business plan executive summary examples .
• Develop an immediate plan that will allow you to know how you can budget or use your finances. You can create a short-term, medium-term, and long-term plan depending on the attainability level of your vision and the realistic implementation of your desired actions.
• Review the entire business financial plan and incorporate adjustments or any other changes when necessary. Develop and update the document as you progress in your business financial planning and action plan implementation so you can maintain its relevance. You may also see  business plan outline examples .

Business Plan with Financial Updating and Forecasting Guide

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Comprehensive Financial Plan for Business

Do You Really Need a Business Financial Plan?

Have you ever asked yourself on why a business financial plan is still used nowadays in various industries even if businesses can resort to the usage of other documents and/or processes when evaluating their financial decisions? The underlying reason behind this is most likely the effectiveness of the document which can be observed in the improvement of a company’s financial condition. Listed below are some of the reasons why it is essential for you to come up with a business financial plan:

• A business financial plan can allow you to list down all the realistic and measurable call to actions that your business can follow. Developing a document that can make it easier for you to implement the things that are necessary for the achievement of your financial goals can positively impact your business and the way it functions as a corporate entity. You may also see importance of business plan examples .
• A business financial plan can make you become more aware of the current financial status of your business and the analysis of your current condition as a corporate entity in terms of your finances. Moreover, it can give you an idea on where your money is going and whether you are efficient enough when it comes to allocating, using, and saving your financial resources. Understanding the flow of money within your business can make it more efficient for you to think of ways on how you can maximize the amount that you spend for particular undertakings. You may also see  bar business plan examples .
• A business financial plan showcases the direction that you can follow so you can take care of your financial future. It is crucial for you to have a document that can serve as your guide whenever you execute action steps involving the finances of your business. Mapping your financial plan can make your business operations become more sustainable which in turn can allow you to better your professional relationships with your stakeholders. You may also see  market analysis business plan examples .
• A business financial plan can teach you  what you should know about financial analysis for small business plans  and even for bigger-scale business planning documents. With the presence of this document, you can make sure that there is a proper assessment of your financial actions, strategies, tactics, and plans. This can help you execute necessary adjustments so that you can potentially reach your goals and objectives as well as realize your financial vision for the organization.

Financial Planning and Business Management Discussion Example

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Business Planning and Financial Forecasting Start-Up

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Business Financial Planning Example

Tips in Making a Business Financial Plan

As a business document, a financial plan promotes awareness of your current corporate financial condition while ensuring that the gathered information can be used to improve the financial standing of the business. This document deals with the programs and activities that are needed for financial growth as well as the resources that the business needs to execute its action plans. A few of the tips that can help you make a highly functional business financial plan include the following:

• Establish a goal and a purpose. Your business financial plan should be guided by a vision so you can make sure that you will develop a relevant and measurable plan for your organization. It is important for you to be aware of what you would like to achieve so you can be focused with the things that you need to prioritize. You may also see  hotel operational business plan examples .
• Just like when creating a  financial consulting business plan , you need to give importance to the clarity of your discussion within a business financial plan. Create an understandable and organized document that contains an in-depth discussion of your financial condition, goals, and plans.
• Be aware of the factors that can affect the effective usage of your business financial plan as well as the elements that are needed to be present and at hand so that your business can achieve its organizational and financial objectives. You have to study the different areas of the business and the trends that are present in various financial reports so you can thoroughly identify how particular activities impact your profitability and financial sustainability. You may also see  implementation plan examples .
• Properly set the timeline of your business financial plan. For your goals to be attainable, you need to ensure that the time frame that you will follow is feasible. Knowing the time duration for each plan of action as well as the dates where milestones must be achieved and/or results are expected to show up can help you assess the success of your business financial plan accordingly. You may also see  risk plan examples .
• Remember that business financial planning is a continuous process. You have to ensure that you will not just look into the output that you would like to have. You need to work in all the phases or areas of your business’s financial planning processes so you can ensure that you can come up with a useful document. You may also see  bookkeeping business plan examples .
• Identify the financial barriers and hindrances for growth that the business is currently facing. In this way, you can also list down different activities and programs that can help you be prepared when facing risks and threats. Knowing the things that stop your business from growing financially can also make it easier for you to implement counteractions in a timely manner. You may also see  lawn care business plan examples .

If you do not know where to start when making a business financial plan, make sure to check out the examples that we have provided you with in this post. Browse through these examples and identify the ones that you can use as your content and formatting guides so you can develop a business financial plan with ease. You may also see  network marketing business plan examples .

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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 Prepare a Financial Plan for Startup Business (w/ example)

Financial Statements Template

Ajay Jagtap

• December 7, 2023
• 13 Min Read

If someone were to ask you about your business financials, could you give them a detailed answer?

Let’s say they ask—how do you allocate your operating expenses? What is your cash flow situation like? What is your exit strategy? And a series of similar other questions.

Instead of mumbling what to answer or shooting in the dark, as a founder, you must prepare yourself to answer this line of questioning—and creating a financial plan for your startup is the best way to do it.

A business plan’s financial plan section is no easy task—we get that.

But, you know what—this in-depth guide and financial plan example can make forecasting as simple as counting on your fingertips.

Ready to get started? Let’s begin by discussing startup financial planning.

What is Startup Financial Planning?

Startup financial planning, in simple terms, is a process of planning the financial aspects of a new business. It’s an integral part of a business plan and comprises its three major components: balance sheet, income statement, and cash-flow statement.

Apart from these statements, your financial section may also include revenue and sales forecasts, assets & liabilities, break-even analysis, and more. Your first financial plan may not be very detailed, but you can tweak and update it as your company grows.

Key Takeaways

• Realistic assumptions, thorough research, and a clear understanding of the market are the key to reliable financial projections.
• Cash flow projection, balance sheet, and income statement are three major components of a financial plan.
• Preparing a financial plan is easier and faster when you use a financial planning tool.
• Exploring “what-if” scenarios is an ideal method to understand the potential risks and opportunities involved in the business operations.

Why is Financial Planning Important to Your Startup?

Poor financial planning is one of the biggest reasons why most startups fail. In fact, a recent CNBC study reported that running out of cash was the reason behind 44% of startup failures in 2022.

A well-prepared financial plan provides a clear financial direction for your business, helps you set realistic financial objectives, create accurate forecasts, and shows your business is committed to its financial objectives.

It’s a key element of your business plan for winning potential investors. In fact, YC considered recent financial statements and projections to be critical elements of their Series A due diligence checklist .

Your financial plan demonstrates how your business manages expenses and generates revenue and helps them understand where your business stands today and in 5 years.

Makes sense why financial planning is important to your startup or small business, doesn’t it? Let’s cut to the chase and discuss the key components of a startup’s financial plan.

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Key Components of a Startup Financial Plan

Whether creating a financial plan from scratch for a business venture or just modifying it for an existing one, here are the key components to consider including in your startup’s financial planning process.

Income Statement

An Income statement , also known as a profit-and-loss statement(P&L), shows your company’s income and expenditures. It also demonstrates how your business experienced any profit or loss over a given time.

Consider it as a snapshot of your business that shows the feasibility of your business idea. An income statement can be generated considering three scenarios: worst, expected, and best.

Your income or P&L statement must list the following:

• Cost of goods or cost of sale
• Gross margin
• Operating expenses
• Revenue streams
• EBITDA (Earnings before interest, tax, depreciation , & amortization )

Established businesses can prepare annual income statements, whereas new businesses and startups should consider preparing monthly statements.

Cash flow Statement

A cash flow statement is one of the most critical financial statements for startups that summarize your business’s cash in-and-out flows over a given time.

This section provides details on the cash position of your business and its ability to meet monetary commitments on a timely basis.

Your cash flow projection consists of the following three components:

✅ Cash revenue projection: Here, you must enter each month’s estimated or expected sales figures.

✅ Cash disbursements: List expenditures that you expect to pay in cash for each month over one year.

✅ Cash flow reconciliation: Cash flow reconciliation is a process used to ensure the accuracy of cash flow projections. The adjusted amount is the cash flow balance carried over to the next month.

Furthermore, a company’s cash flow projections can be crucial while assessing liquidity, its ability to generate positive cash flows and pay off debts, and invest in growth initiatives.

Balance Sheet

Your balance sheet is a financial statement that reports your company’s assets, liabilities, and shareholder equity at a given time.

Consider it as a snapshot of what your business owns and owes, as well as the amount invested by the shareholders.

This statement consists of three parts: assets , liabilities, and the balance calculated by the difference between the first two. The final numbers on this sheet reflect the business owner’s equity or value.

Balance sheets follow the following accounting equation with assets on one side and liabilities plus Owner’s equity on the other:

Here is what’s the core purpose of having a balance-sheet:

• Indicates the capital need of the business
• It helps to identify the allocation of resources
• It calculates the requirement of seed money you put up, and
• How much finance is required?

Since it helps investors understand the condition of your business on a given date, it’s a financial statement you can’t miss out on.

Break-even Analysis

Break-even analysis is a startup or small business accounting practice used to determine when a company, product, or service will become profitable.

For instance, a break-even analysis could help you understand how many candles you need to sell to cover your warehousing and manufacturing costs and start making profits.

Remember, anything you sell beyond the break-even point will result in profit.

You must be aware of your fixed and variable costs to accurately determine your startup’s break-even point.

• Fixed costs: fixed expenses that stay the same no matter what.
• Variable costs: expenses that fluctuate over time depending on production or sales.

A break-even point helps you smartly price your goods or services, cover fixed costs, catch missing expenses, and set sales targets while helping investors gain confidence in your business. No brainer—why it’s a key component of your startup’s financial plan.

Having covered all the key elements of a financial plan, let’s discuss how you can create a financial plan for your startup or small business.

How to Create a Financial Section of a Startup Business Plan?

1. determine your financial needs.

You can’t start financial planning without understanding your financial requirements, can you? Get your notepad or simply open a notion doc; it’s time for some critical thinking.

Start by assessing your current situation by—calculating your income, expenses , assets, and liabilities, what the startup costs are, how much you have against them, and how much financing you need.

Assessing your current financial situation and health will help determine how much capital you need for your small business and help plan fundraising activities and outreach.

Furthermore, determining financial needs helps prioritize operational activities and expenses, effectively allocate resources, and increase the viability and sustainability of a business in the long run.

Having learned to determine financial needs, let’s head straight to setting financial goals.

2. Define Your Financial Goals

Setting realistic financial goals is fundamental in preparing an effective financial plan for your business plan. So, it would help to outline your long-term strategies and goals at the beginning of your financial planning process.

Let’s understand it this way—if you are a SaaS startup pursuing VC financing rounds, you may ask investors about what matters to them the most and prepare your financial plan accordingly.

However, a coffee shop owner seeking a business loan may need to create a plan that appeals to banks, not investors. At the same time, an internal financial plan designed to offer financial direction and resource allocation may not be the same as previous examples, seeing its different use case.

Feeling overwhelmed? Just define your financial goals—you’ll be fine.

You can start by identifying your business KPIs (key performance indicators); it would be an ideal starting point.

3. Choose the Right Financial Planning Tool

Let’s face it—preparing a financial plan using Excel is no joke. One would only use this method if they had all the time in the world.

Having the right financial planning software will simplify and speed up the process and guide you through creating accurate financial forecasts.

Many financial planning software and tools claim to be the ideal solution, but it’s you who will identify and choose a tool that is best for your financial planning needs.

Create a Financial Plan with Upmetrics in no time

Enter your Financial Assumptions, and we’ll calculate your monthly/quarterly and yearly financial projections.

Start Forecasting

4. Make Assumptions Before Projecting Financials

Once you have a financial planning tool, you can move forward to the next step— making financial assumptions for your plan based on your company’s current performance and past financial records.

You’re just making predictions about your company’s financial future, so there’s no need to overthink or complicate the process.

You can gather your business’ historical financial data, market trends, and other relevant documents to help create a base for accurate financial projections.

After you have developed rough assumptions and a good understanding of your business finances, you can move forward to the next step—projecting financials.

5. Prepare Realistic Financial Projections

It’s a no-brainer—financial forecasting is the most critical yet challenging aspect of financial planning. However, it’s effortless if you’re using a financial planning software.

Upmetrics’ forecasting feature can help you project financials for up to 7 years. However, new startups usually consider planning for the next five years. Although it can be contradictory considering your financial goals and investor specifications.

Following are the two key aspects of your financial projections:

Revenue Projections

In simple terms, revenue projections help investors determine how much revenue your business plans to generate in years to come.

It generally involves conducting market research, determining pricing strategy , and cash flow analysis—which we’ve already discussed in the previous steps.

The following are the key components of an accurate revenue projection report:

• Market analysis
• Sales forecast
• Pricing strategy
• Growth assumptions
• Seasonal variations

This is a critical section for pre-revenue startups, so ensure your projections accurately align with your startup’s financial model and revenue goals.

Expense Projections

Both revenue and expense projections are correlated to each other. As revenue forecasts projected revenue assumptions, expense projections will estimate expenses associated with operating your business.

Accurately estimating your expenses will help in effective cash flow analysis and proper resource allocation.

These are the most common costs to consider while projecting expenses:

• Fixed costs
• Variable costs
• Employee costs or payroll expenses
• Operational expenses
• Marketing and advertising expenses
• Emergency fund

Remember, realistic assumptions, thorough research, and a clear understanding of your market are the key to reliable financial projections.

6. Consider “What if” Scenarios

After you project your financials, it’s time to test your assumptions with what-if analysis, also known as sensitivity analysis.

Using what-if analysis with different scenarios while projecting your financials will increase transparency and help investors better understand your startup’s future with its best, expected, and worst-case scenarios.

Exploring “what-if” scenarios is the best way to better understand the potential risks and opportunities involved in business operations. This proactive exercise will help you make strategic decisions and necessary adjustments to your financial plan.

7. Build a Visual Report

If you’ve closely followed the steps leading to this, you know how to research for financial projections, create a financial plan, and test assumptions using “what-if” scenarios.

Now, we’ll prepare visual reports to present your numbers in a visually appealing and easily digestible format.

Don’t worry—it’s no extra effort. You’ve already made a visual report while creating your financial plan and forecasting financials.

Check the dashboard to see the visual presentation of your projections and reports, and use the necessary financial data, diagrams, and graphs in the final draft of your financial plan.

Here’s what Upmetrics’ dashboard looks like:

8. Monitor and Adjust Your Financial Plan

Even though it’s not a primary step in creating a good financial plan for your small business, it’s quite essential to regularly monitor and adjust your financial plan to ensure the assumptions you made are still relevant, and you are heading in the right direction.

There are multiple ways to monitor your financial plan.

For instance, you can compare your assumptions with actual results to ensure accurate projections based on metrics like new customers acquired and acquisition costs, net profit, and gross margin.

Consider making necessary adjustments if your assumptions are not resonating with actual numbers.

Also, keep an eye on whether the changes you’ve identified are having the desired effect by monitoring their implementation.

And that was the last step in our financial planning guide. However, it’s not the end. Have a look at this financial plan example.

Startup Financial Plan Example

Having learned about financial planning, let’s quickly discuss a coffee shop startup financial plan example prepared using Upmetrics.

Important Assumptions

• The sales forecast is conservative and assumes a 5% increase in Year 2 and a 10% in Year 3.
• The analysis accounts for economic seasonality – wherein some months revenues peak (such as holidays ) and wanes in slower months.
• The analysis assumes the owner will not withdraw any salary till the 3rd year; at any time it is assumed that the owner’s withdrawal is available at his discretion.
• Sales are cash basis – nonaccrual accounting
• Moderate ramp- up in staff over the 5 years forecast
• Barista salary in the forecast is $36,000 in 2023.
• In general, most cafes have an 85% gross profit margin
• In general, most cafes have a 3% net profit margin

Projected Balance Sheet

Projected Cash-Flow Statement

Projected Profit & Loss Statement

Break Even Analysis

Start Preparing Your Financial Plan

We covered everything about financial planning in this guide, didn’t we? Although it doesn’t fulfill our objective to the fullest—we want you to finish your financial plan.

Sounds like a tough job? We have an easy way out for you—Upmetrics’ financial forecasting feature. Simply enter your financial assumptions, and let it do the rest.

So what are you waiting for? Try Upmetrics and create your financial plan in a snap.

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with step-by-step Guidance & AI Assistance.

Frequently Asked Questions

How often should i update my financial projections.

Well, there is no particular rule about it. However, reviewing and updating your financial plan once a year is considered an ideal practice as it ensures that the financial aspirations you started and the projections you made are still relevant.

How do I estimate startup costs accurately?

You can estimate your startup costs by identifying and factoring various one-time, recurring, and hidden expenses. However, using a financial forecasting tool like Upmetrics will ensure accurate costs while speeding up the process.

What financial ratios should startups pay attention to?

Here’s a list of financial ratios every startup owner should keep an eye on:

• Net profit margin
• Current ratio
• Quick ratio
• Working capital
• Return on equity
• Debt-to-equity ratio
• Return on assets
• Debt-to-asset ratio

What are the 3 different scenarios in scenario analysis?

As discussed earlier, Scenario analysis is the process of ascertaining and analyzing possible events that can occur in the future. Startups or small businesses often consider analyzing these three scenarios:

• base-case (expected) scenario
• Worst-case scenario
• best case scenario.

About the Author

Ajay is the Head of Content at Upmetrics. Before joining our team, he was a personal finance blogger and SaaS writer, covering topics such as startups, budgeting, and credit cards. If not writing, he’s probably having a power nap. Read more

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How to Write the Financial Section of a Business Plan

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

Taking Stock of Expenses

The income statement, the cash flow projection, the balance sheet.

The financial section of your business plan determines whether or not your business idea is viable and will be the focus of any investors who may be attracted to your business idea. The financial section is composed of four financial statements: the income statement, the cash flow projection, the balance sheet, and the statement of shareholders' equity. It also should include a brief explanation and analysis of these four statements.

Think of your business expenses as two cost categories: your start-up expenses and your operating expenses. All the costs of getting your business up and running should be considered start-up expenses. These may include:

• Business registration fees
• Business licensing and permits
• Starting inventory
• Rent deposits
• Down payments on a property
• Down payments on equipment
• Utility setup fees

Your own list will expand as soon as you start to itemize them.

Operating expenses are the costs of keeping your business running . Think of these as your monthly expenses. Your list of operating expenses may include:

• Salaries (including your own)
• Rent or mortgage payments
• Telecommunication expenses
• Raw materials
• Distribution
• Loan payments
• Office supplies
• Maintenance

Once you have listed all of your operating expenses, the total will reflect the monthly cost of operating your business. Multiply this number by six, and you have a six-month estimate of your operating expenses. Adding this amount to your total startup expenses list, and you have a ballpark figure for your complete start-up costs.

Now you can begin to put together your financial statements for your business plan starting with the income statement.

The income statement shows your revenues, expenses, and profit for a particular period—a snapshot of your business that shows whether or not your business is profitable. Subtract expenses from your revenue to determine your profit or loss.

While established businesses normally produce an income statement each fiscal quarter or once each fiscal year, for the purposes of the business plan, an income statement should be generated monthly for the first year.

Not all of the categories in this income statement will apply to your business. Eliminate those that do not apply, and add categories where necessary to adapt this template to your business.

If you have a product-based business, the revenue section of the income statement will look different. Revenue will be called sales, and you should account for any inventory.

The cash flow projection shows how cash is expected to flow in and out of your business. It is an important tool for cash flow management because it indicates when your expenditures are too high or if you might need a short-term investment to deal with a cash flow surplus. As part of your business plan, the cash flow projection will show how  much capital investment  your business idea needs.

For investors, the cash flow projection shows whether your business is a good credit risk and if there is enough cash on hand to make your business a good candidate for a line of credit, a  short-term loan , or a longer-term investment. You should include cash flow projections for each month over one year in the financial section of your business plan.

Do not confuse the cash flow projection with the cash flow statement. The cash flow statement shows the flow of cash in and out of your business. In other words, it describes the cash flow that has occurred in the past. The cash flow projection shows the cash that is anticipated to be generated or expended over a chosen period in the future.

There are three parts to the cash flow projection:

• Cash revenues: Enter your estimated sales figures for each month. Only enter the sales that are collectible in cash during each month you are detailing.
• Cash disbursements: Take the various expense categories from your ledger and list the cash expenditures you actually expect to pay for each month.
• Reconciliation of cash revenues to cash disbursements: This section shows an opening balance, which is the carryover from the previous month's operations. The current month's revenues are added to this balance, the current month's disbursements are subtracted, and the adjusted cash flow balance is carried over to the next month.

The balance sheet reports your business's net worth at a particular point in time. It summarizes all the financial data about your business in three categories:

• Assets:  Tangible objects of financial value that are owned by the company.
• Liabilities: Debt owed to a creditor of the company.
• Equity: The net difference when the  total liabilities  are subtracted from the total assets .

The relationship between these elements of financial data is expressed with the equation: Assets = Liabilities + Equity .

For your  business plan , you should create a pro forma balance sheet that summarizes the information in the income statement and cash flow projections. A business typically prepares a balance sheet once a year.

Once your balance sheet is complete, write a brief analysis for each of the three financial statements. The analysis should be short with highlights rather than an in-depth analysis. The financial statements themselves should be placed in your business plan's appendices.

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Start » startup, business plan financials: 3 statements to include.

The finance section of your business plan is essential to securing investors and determining whether your idea is even viable. Here's what to include.

If your business plan is the blueprint of how to run your company, the financials section is the key to making it happen. The finance section of your business plan is essential to determining whether your idea is even viable in the long term. It’s also necessary to convince investors of this viability and subsequently secure the type and amount of funding you need. Here’s what to include in your business plan financials.

[Read: How to Write a One-Page Business Plan ]

What are business plan financials?

Business plan financials is the section of your business plan that outlines your past, current and projected financial state. This section includes all the numbers and hard data you’ll need to plan for your business’s future, and to make your case to potential investors. You will need to include supporting financial documents and any funding requests in this part of your business plan.

Business plan financials are vital because they allow you to budget for existing or future expenses, as well as forecast your business’s future finances. A strongly written finance section also helps you obtain necessary funding from investors, allowing you to grow your business.

Sections to include in your business plan financials

Here are the three statements to include in the finance section of your business plan:

Profit and loss statement

A profit and loss statement , also known as an income statement, identifies your business’s revenue (profit) and expenses (loss). This document describes your company’s overall financial health in a given time period. While profit and loss statements are typically prepared quarterly, you will need to do so at least annually before filing your business tax return with the IRS.

Common items to include on a profit and loss statement :

• Revenue: total sales and refunds, including any money gained from selling property or equipment.
• Expenditures: total expenses.
• Cost of goods sold (COGS): the cost of making products, including materials and time.
• Gross margin: revenue minus COGS.
• Operational expenditures (OPEX): the cost of running your business, including paying employees, rent, equipment and travel expenses.
• Depreciation: any loss of value over time, such as with equipment.
• Earnings before tax (EBT): revenue minus COGS, OPEX, interest, loan payments and depreciation.
• Profit: revenue minus all of your expenses.

Businesses that have not yet started should provide projected income statements in their financials section. Currently operational businesses should include past and present income statements, in addition to any future projections.

[Read: Top Small Business Planning Strategies ]

A strongly written finance section also helps you obtain necessary funding from investors, allowing you to grow your business.

Balance sheet

A balance sheet provides a snapshot of your company’s finances, allowing you to keep track of earnings and expenses. It includes what your business owns (assets) versus what it owes (liabilities), as well as how much your business is currently worth (equity).

On the assets side of your balance sheet, you will have three subsections: current assets, fixed assets and other assets. Current assets include cash or its equivalent value, while fixed assets refer to long-term investments like equipment or buildings. Any assets that do not fall within these categories, such as patents and copyrights, can be classified as other assets.

On the liabilities side of your balance sheet, include a total of what your business owes. These can be broken down into two parts: current liabilities (amounts to be paid within a year) and long-term liabilities (amounts due for longer than a year, including mortgages and employee benefits).

Once you’ve calculated your assets and liabilities, you can determine your business’s net worth, also known as equity. This can be calculated by subtracting what you owe from what you own, or assets minus liabilities.

Cash flow statement

A cash flow statement shows the exact amount of money coming into your business (inflow) and going out of it (outflow). Each cost incurred or amount earned should be documented on its own line, and categorized into one of the following three categories: operating activities, investment activities and financing activities. These three categories can all have inflow and outflow activities.

Operating activities involve any ongoing expenses necessary for day-to-day operations; these are likely to make up the majority of your cash flow statement. Investment activities, on the other hand, cover any long-term payments that are needed to start and run your business. Finally, financing activities include the money you’ve used to fund your business venture, including transactions with creditors or funders.

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Business Plan Outline and Example

As you begin writing a business plan outline, you will quickly realize that there is more to it than meets the eye. Not only do you need to have a clear understanding of what a business plan is and what types of information it should include, but you also need to be aware of the different types of business plans that are available. Furthermore, it is important to understand why you should write a successful business plan and what common mistakes people make when doing so. Finally, this article provides a brief overview of what should be included in your business planning, such as an executive summary , market analysis, company description, and financial statements , as well as a template and an example to help you get started.

What is a Business Plan?

A business plan is a formal document that provides an executive summary and outlines the goals and objectives of a business. It provides a roadmap for the business, outlining how it will achieve its goals and reach its target market analysis. The traditional business plan outline should also include business financials and a marketing plan.

Types of Business Plans

There are several different types of business plans, each of which serves a different purpose. The most common types of business plans are start-up, growth, and exit business plans. 

Start-up Business Plan

A start-up business plan is a document that outlines the goals and objectives as well as provides an executive summary of a new business. It provides a roadmap for the business, outlining how it will achieve its goals and reach its target market. The start-up business plan should also include financial projections and a marketing strategy.

Growth Business Plan

A growth business plan is a document that outlines the goals and objectives of a business that is looking to expand. It provides a roadmap for the business, outlining the market analysis section, and the company’s history as well as how they plan to secure funding to grow the business. The growth detailed business plan should also include financial health and a cash flow statement.

Exit Business Plan

An exit business plan is a document that outlines the goals and objectives of a business that is looking to be sold or go public. It provides a roadmap for the business, outlining how it will achieve its goals and reach its target market. The exit business plan should also include financial projections and a marketing strategy.

Why Write a Business Plan?

There are several reasons why you might want to write a traditional business plan outline. Firstly, it can help you to clarify your ideas and bring structure to your thoughts. Secondly, it can help you to communicate your operations plan to others, such as potential investors or partners. Thirdly, it can help you to track your progress and make necessary adjustments along the way. Many business owners find it can give you a sense of direction and purpose, helping you to stay focused on your goals.

Tips for Creating a Business Plan

• Do your research . Before you start writing your business plan , you should research your industry and competitor businesses. This will help you to better understand the market opportunity and the potential for your business idea.
• Keep it simple . Your business plan should be clear and concise. Communicating your key points should not be longer than necessary.
• Be realistic . When making a financial plan and projections, be conservative and realistic. overestimating your revenue and profits can make it difficult to attract investors even for an established business.
• Get help . If you are unsure how to write a business plan, many resources are available to help you. You can hire a consultant, or use one of the many business plan templates or software programs available.

Common Mistakes When Writing a Business Plan

• Not doing your research . Before you start writing your business plan, you should do your homework and gather all of the information that you will need. This includes market research, financial projections, and competitive analysis.
• Not being clear and concise . Your business plan should be clear and concise. It should be free of jargon and technical terms, and easy for the reader to understand.
• Not having a solid financial plan . Your business plan should include a realistic financial plan, including income statements, balance sheets, and cash flow statements.
• Not having an exit strategy . You should have a clear exit strategy in place before you start your business. This will help you to focus on growth and profitability and will make it easier to attract investors.
• Not being realistic . Your business plan should be realistic and based on solid market research and financial projections. Don’t try to over-hype your business or make unrealistic promises.

Business Plan Template

Below is a basic business plan template that you can use when creating your business plan.

Executive Summary

The executive summary section of the business plan template should provide a brief overview of your business, including your company name, your mission statement, your product or service, and your target market.

Company Overview

This section should provide an overview of your company, including your history, your management team, your industry, and your competitive advantage.

Product or Service

This section should describe your product or service, including its features and benefits, your target market, and your pricing strategy.

Marketing Plan, Market Analysis, and Sales Strategy

This section should describe your marketing and sales strategy, including your advertising and promotion plans, your marketing plan, your sales process, your target customers, and your distribution channels.

Financial Plans

This section should include your financial statements, financial model, income statement, balance sheet, and cash flow statement.

Exit Strategy

This section should describe your exit strategy, including your plans for selling your business or exiting the market.

Business Plan Example

Below is an example of a traditional business plan.

XYZ Corporation is a start-up company that will provide an innovative new product to the market. Our product is an XYZ widget that will revolutionize the way people use widgets. We have a strong management team, a solid business model, and a clear path to profitability. We are seeking $1 million in funding to help us launch our product and grow our business.

XYZ Corporation was founded in XYZ by John Doe and Jane Smith. John is a widgets expert with over 20 years of experience in the widget industry. Jane is a marketing wizard who has helped launch several successful products. Together, they make a perfect team to bring the XYZ widget to market.

The XYZ widget is an innovative new product that will revolutionize the way people use widgets. It is smaller, lighter, and more durable than any other widget on the market. It also has a unique feature that allows it to be used in XYZ ways. We are targeting the widget market, which is estimated to be $1 billion annually.

Marketing and Sales

We will use a combination of online and offline marketing to reach our target market. Our website will be the centerpiece of our marketing efforts, and we will also use print ads, trade shows, and direct mail. Our sales team will consist of experienced widget salespeople who know how to close deals.

Financial Projections

We are requesting $1 million in funding, which will be used to finance our inventory, marketing efforts, and working capital. We anticipate generating $5 million in revenue in our first year of operation and reaching profitability by the end of year two.

Our exit strategy is to sell the company to a larger widget manufacturer or private equity firm within five years. We believe that our innovative product and strong growth potential will make us an attractive acquisition target.

Business Plan FAQ

What is a business plan.

A business plan is a document that describes your business, its objectives, its strategies, its market, and its financial projections. It is typically used to attract financing from investors or lenders.

Why write a business plan?

A business plan can help you to clarify your business goals, and to develop a plan of action to achieve them. It can also be a useful tool to communicate your business plan to potential investors or lenders.

What are the different types of business plans?

There are many different types of business plans, and each one is tailored to the specific needs of the business. Some common types of business plans include startup plans, growth plans, expansion plans, acquisition plans, and exit plans.

Why is a business plan important?

A business plan is important because it helps to clarify the goals of the business and to develop a plan of action to achieve those goals. It also helps communicate the business plan to potential investors or lenders.

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