Business Plan Financial Statements

Most business owners specialize in the products or services they provide to their customers … not managing money or creating business plan financial statements. “The Guardian” stated that most startup businesses fail because they run out of money.  As a small business owner, understanding the relationship between revenues and expenses will offer you numerous benefits such as:

  • Identifying expenses draining your cash.
  • Identify expenses that may be eliminated.
  • Pinpoint areas in your business that may be improved.
  • Project revenues for the month, year…or even 10 years.
  • Know when your business made need an influx of cash.
  • Know when your business may have excess profits.

Custom Business Plan Financial Statements

Properly prepared financial statements offer small business owners even more benefits than the ones listed above.  For example, customized financial statements in an Excel spreadsheet have even more benefits for the small business owner.  Customized financial statements will:

  • Have profit centers and expenses tailored to your personal needs.
  • Allow for flexibility in changing or adjusting the components of the financial statement as your business needs change.
  • Continually adjusts specific areas of the financial statement and watch the changes roll over to the projected first-year income statement  through the 10 year pro forma estimates.

Create Your Own Financial Model!

Financial Statements

Our business plan writers use financial statements as a key component to your business plan, if the small business owner desires funding from banks, angel investors, or venture capitalists.  To illustrate, the financial statements commonly included in our business plans: cash budget statement, income statement, and balance sheet.  Please keep in mind, I am not an accountant.  However, all financial statements (pro forma) are educated guesses as to how a business will perform in the future.  In other words, pro forma financial statements, in business plans, represent educated guesses from knowledgeable professionals.  From this, my experience in academia and the business world gives me ample experience to construct solid business financials for my customers.

Cash Budget:

The cash budget statement uses estimates on a monthly basis to construct revenues and expenses.  At the end of each month, the business owner can see, proximately, what their profits will be and if additional funding will be required for the month.  The benefit for understanding and using the cash budget statement and business plans is quite simple. A business owner needs to know if they are going to run out of cash for their operations.  On a final note, the cash budget statement is the foundation that I use in creating the pro forma income statement.

Income Statement:

The income statement identifies revenues and expenses on a yearly basis.  Further, profits and losses for the year may be identified in this financial statement. The pro forma income statement in my financial assessments usually cover between 3 to 5 years.  When I construct these statements, I start with estimating the yearly growth for the company using industry projections, if available.  From this, I estimate expenses based on the percentage of sales for the company.  Finally, the net income may be derived from these projections.

Balance Sheet:

The balance sheet is a snapshot as to the standing of a company at the end of a specific period, usually one year.  The first year the balance sheet is always the easiest to create.  In my financials, I start with identifying debt and equity within the company.  From this, I am able to construct the asset side of the balance sheet and project liabilities for the first year.  After the first year, the estimates for the various components of the balance sheet are used as a percentage of total assets.