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financial_statements_and_projections.docxFinancial Statements and Projections
(3-5 pages) – Develop projected financial statements for the first year of business. You may use the Business Plan Financials Template to prepare this section (see Appendix B) or you may create your own template.
Revenue and Cost Estimate
This is the first part of the profit and loss statement. You will estimate the revenue (sales) and expenses for the first 12 months of your business.
Forecasted Profit and Loss Statement
(Month by month for 1st 12 months)– Here you will consider the sales forecast, the operating expenses, and the profits. Take the month-by-month revenue estimates of sales and expenses from the revenue and cost estimate (F1) and include interest expense to obtain a profit projection for your first year of operations. It will reveal net profit (obtained from subtracting the interest expense from the profit before interest). The profit before interest is calculated by subtracting total expenses from total revenue.
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Salary expenses |
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Payroll expenses |
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General and administrative |
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Repairs and maintenance |
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Marketing and Advertising |
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Accounting and legal |
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Utilities |
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Insurance |
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Taxes (real estate, etc.) |
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Selling Expenses |
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Other expenses (specify) |
Examples of expenses may include:
Forecasted Balance Sheet
This statement deals with cash and income and also with assets, liabilities, and capital. The balance should result in the debit and credit balances ending up equal.
Financial Projections
(1-2 pages)- Summarize the financial projections and the assumption used in estimating the projections in section F.
Breakeven Point-
Include an estimate of income and expenses. It determines whether or not your business will bring in enough money to meet its costs.
This method is used to determine the exact point at which the business makes neither takes a loss nor makes a profit. It is calculated at a point where sales have grown at a greater rate than costs and the two lines cross.
Financial Position:
Include the estimated financial position of the company at the end of the first year and the estimated capital/investment needs. Make sure to include any assumptions you used in estimating this information.
Capital/Investment Needs:
Estimate the capital and investment needs for your company. Be sure to discuss any equity contributions your company will need along with other start up costs required.
