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

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

Startup Financial Projections Template

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

putting together business plan financials

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 Business Profit and Loss Template

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

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

putting together business plan financials

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

putting together business plan financials

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

3 Year Cash Flow Statement Template

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

putting together business plan financials

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

putting together business plan financials

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

putting together business plan financials

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

Basic Sales Forecast 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

putting together business plan financials

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

3 Year Sales Forecast Template

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

Break Even Analysis

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

putting together business plan financials

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

putting together business plan financials

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

putting together business plan financials

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

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

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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Writing a Business Plan—Financial Projections

Spell out your financial forecast in dollars and sense

Creating financial projections for your startup is both an art and a science. Although investors want to see cold, hard numbers, it can be difficult to predict your financial performance three years down the road, especially if you are still raising seed money. Regardless, short- and medium-term financial projections are a required part of your business plan if you want serious attention from investors.

The financial section of your business plan should include a sales forecast , expenses budget , cash flow statement , balance sheet , and a profit and loss statement . Be sure to follow the generally accepted accounting principles (GAAP) set forth by the Financial Accounting Standards Board , a private-sector organization responsible for setting financial accounting and reporting standards in the U.S. If financial reporting is new territory for you, have an accountant review your projections.

Sales Forecast

As a startup business, you do not have past results to review, which can make forecasting sales difficult. It can be done, though, if you have a good understanding of the market you are entering and industry trends as a whole. In fact, sales forecasts based on a solid understanding of industry and market trends will show potential investors that you've done your homework and your forecast is more than just guesswork.

In practical terms, your forecast should be broken down by monthly sales with entries showing which units are being sold, their price points, and how many you expect to sell. When getting into the second year of your business plan and beyond, it's acceptable to reduce the forecast to quarterly sales. In fact, that's the case for most items in your business plan.

Expenses Budget

What you're selling has to cost something, and this budget is where you need to show your expenses. These include the cost to your business of the units being sold in addition to overhead. It's a good idea to break down your expenses by fixed costs and variable costs. For example, certain expenses will be the same or close to the same every month, including rent, insurance, and others. Some costs likely will vary month by month such as advertising or seasonal sales help.

Cash Flow Statement

As with your sales forecast, cash flow statements for a startup require doing some homework since you do not have historical data to use as a reference. This statement, in short, breaks down how much cash is coming into your business on a monthly basis vs. how much is going out. By using your sales forecasts and your expenses budget, you can estimate your cash flow intelligently.

Keep in mind that revenue often will trail sales, depending on the type of business you are operating. For example, if you have contracts with clients, they may not be paying for items they purchase until the month following delivery. Some clients may carry balances 60 or 90 days beyond delivery. You need to account for this lag when calculating exactly when you expect to see your revenue.

Profit and Loss Statement

Your P&L statement should take the information from your sales projections, expenses budget, and cash flow statement to project how much you expect in profits or losses through the three years included in your business plan. You should have a figure for each individual year as well as a figure for the full three-year period.

Balance Sheet

You provide a breakdown of all of your assets and liabilities in the balances sheet. Many of these assets and liabilities are items that go beyond monthly sales and expenses. For example, any property, equipment, or unsold inventory you own is an asset with a value that can be assigned to it. The same goes for outstanding invoices owed to you that have not been paid. Even though you don't have the cash in hand, you can count those invoices as assets. The amount you owe on a business loan or the amount you owe others on invoices you've not paid would count as liabilities. The balance is the difference between the value of everything you own vs. the value of everything you owe.

Break-Even Projection

If you've done a good job projecting your sales and expenses and inputting the numbers into a spreadsheet, you should be able to identify a date when your business breaks even—in other words, the date when you become profitable, with more money coming in than going out. As a startup business, this is not expected to happen overnight, but potential investors want to see that you have a date in mind and that you can support that projection with the numbers you've supplied in the financial section of your business plan.

Additional Tips

When putting together your financial projections, keep some general tips in mind:

  • Get comfortable with spreadsheet software if you aren't already. It is the starting point for all financial projections and offers flexibility, allowing you to quickly change assumptions or weigh alternative scenarios. Microsoft Excel is the most common, and chances are you already have it on your computer. You can also buy special software packages to help with financial projections.
  • Prepare a five-year projection . Don’t include this one in the business plan, since the further into the future you project, the harder it is to predict. However, have the projection available in case an investor asks for it.
  • Offer two scenarios only . Investors will want to see a best-case and worst-case scenario, but don’t inundate your business plan with myriad medium-case scenarios. They likely will just cause confusion.
  • Be reasonable and clear . As mentioned before, financial forecasting is as much art as science. You’ll have to assume certain things, such as your revenue growth, how your raw material and administrative costs will grow, and how effective you’ll be at collecting on accounts receivable. It’s best to be realistic in your projections as you try to recruit investors. If your industry is going through a contraction period and you’re projecting revenue growth of 20 percent a month, expect investors to see red flags.

4 Steps to Creating a Financial Plan for Your Small Business

Rami Ali

When it comes to long-term business success, preparation is the name of the game. And the key to that preparation is a solid financial plan that sets forth a business’s short- and long-term financial goals and how it intends to reach them. Used by company decision-makers and potential partners, investors and lenders, alike, a financial plan typically includes the company’s sales forecast, cash flow projection, expected expenses, key financial metrics and more. Here is what small businesses should understand to create a comprehensive financial plan of their own.

What Is a Financial Plan?

A financial plan is a document that businesses use to detail and manage their finances, ensure efficient allocation of resources and inform a plethora of decisions — everything from setting prices, to expanding the business, to optimizing operations, to name just a few. The financial plan provides a clear understanding of the company’s current financial standing; outlines its strategies, goals and projections; makes clear whether an idea is sustainable and worthy of investment; and monitors the business’s financial health as it grows and matures. Financial plans can be adjusted over time as forecasts become replaced with real-world results and market forces change.

A financial plan is an integral part of an overall business plan, ensuring financial objectives align with overall business goals. It typically contains a description of the business, financial statements, personnel plan, risk analysis and relevant key performance indicators (KPIs) and ratios. By providing a comprehensive view of the company’s finances and future goals, financial plans also assist in attracting investors and other sources of funding.

Key Takeaways

  • A financial plan details a business’s current standing and helps business leaders make informed decisions about future endeavors and strategies.
  • A financial plan includes three major financial statements: the income statement, balance sheet and cash flow statement.
  • A financial plan answers essential questions and helps track progress toward goals.
  • Financial management software gives decision-makers the tools they need to make strategic decisions.

Why Is a Financial Plan Important to Your Small Business?

A financial plan can provide small businesses with greater confidence in their short- and long-term endeavors by helping them determine ways to best allocate and invest their resources. The process of creating the plan forces businesses to think through how different decisions could impact revenue and which occasions call for dipping into reserve funds. It’s also a helpful tool for monitoring performance, managing cash flow and tracking financial metrics.

Simply put, a financial plan shows where the business stands; over time, its analysis will reveal whether its investments were worthwhile and worth repeating. In addition, when a business is courting potential partners, investors and lenders, the financial plan spotlights the business’s commitment to spending wisely and meeting its financial obligations.

Benefits of a Financial Plan

A financial plan is only as effective as the data foundation it’s built on and the business’s flexibility to revisit it amid changing market forces and demand shifts. Done correctly, a financial plan helps small businesses stay on track so they can reach their short-term and long-term goals. Among the benefits that effective financial planning delivers:

  • A clear view of goals and objectives: As with any type of business plan, it’s imperative that everyone in a company is on the same financial page. With clear responsibilities and expected results mapped out, every team member from the top down sees what needs to be done, when to do it and why.
  • More accurate budgets and projections: A comprehensive financial plan leads to realistic budgets that allocate resources appropriately and plan for future revenue and expenses. Financial projections also help small businesses lay out steps to maintain business continuity during periods of cash flow volatility or market uncertainty.
  • External funding opportunities: With a detailed financial plan in hand, potential partners, lenders and investors can see exactly where their money will go and how it will be used. The inclusion of stellar financial records, including past and current liabilities, can also assure external funding sources that they will be repaid.
  • Performance monitoring and course correction: Small businesses can continue to benefit from their financial plans long after the plan has been created. By continuously monitoring results and comparing them with initial projections, businesses have the opportunity to adjust their plans as needed.

Components of a Small Business Financial Plan

A sound financial plan is instrumental to the success and stability of a small business. Whether the business is starting from scratch or modifying its plan, the best financial plans include the following elements:

Income statement: The income statement reports the business’s net profit or loss over a specific period of time, such a month, quarter or year. Also known as a profit-and-loss statement (P&L) or pro forma income statement, the income statement includes the following elements:

  • Cost of goods sold (COGS): The direct costs involved in producing goods or services.
  • Operating expenses: Rent, utilities and other costs involved in running the business.
  • Revenue streams: Usually in the form of sales and subscription services, among other sources.
  • Total net profit or loss: Derived from the total amount of sales less expenses and taxes.

Balance sheet: The balance sheet reports the business’s current financial standing, focusing on what it owns, what it owes and shareholder equity:

  • Assets: Available cash, goods and other owned resources.
  • Liabilities: Amounts owed to suppliers, personnel, landlords, creditors, etc.

Shareholder equity: Measures the company’s net worth, calculated with this formula:

Shareholder Equity = Assets – Liability

The balance sheet lists assets, liabilities and equity in chart format, with assets in the left column and liabilities and equity on the right. When complete — and as the name implies —the two sides should balance out to zero, as shown on the sample balance sheet below. The balance sheet is used with other financial statements to calculate business financial ratios (discussed soon).

Balance Sheet

Cash flow projection: Cash flow projection is a part of the cash flow statement , which is perhaps one of the most critical aspects of a financial plan. After all, businesses run on cash. The cash flow statement documents how much cash came in and went out of the business during a specific time period. This reveals its liquidity, meaning how much cash it has on hand. The cash flow projection should display how much cash a business currently has, where it’s going, where future cash will come from and a schedule for each activity.

Personnel plan: A business needs the right people to meet its goals and maintain a healthy cash flow. A personnel plan looks at existing positions, helps determine when it’s time to bring on more team members and determines whether new hires should be full-time, part-time or work on a contractual basis. It also examines compensation levels, including benefits, and forecasts those costs against potential business growth to gauge whether the potential benefits of new hires justify the expense.

Business ratios: In addition to a big-picture view of the business, decision-makers will need to drill down to specific aspects of the business to understand how individual areas are performing. Business ratios , such as net profit margin, return on equity, accounts payable turnover, assets to sales, working capital and total debt to total assets, help evaluate the business’s financial health. Data used to calculate these ratios come from the P&L statement, balance sheet and cash flow statement. Business ratios contextualize financial data — for example, net profit margin shows the profitability of a company’s operations in relation to its revenue. They are often used to help request funding from a bank or investor, as well.

Sales forecast: How much will you sell in a specific period? A sales forecast needs to be an ongoing part of any planning process since it helps predict cash flow and the organization’s overall health. A forecast needs to be consistent with the sales number within your P&L statement. Organizing and segmenting your sales forecast will depend on how thoroughly you want to track sales and the business you have. For example, if you own a hotel and giftshop, you may want to track separately sales from guests staying the night and sales from the shop.

Cash flow projection: Perhaps one of the most critical aspects of your financial plan is your cash flow statement . Your business runs on cash. Understanding how much cash is coming in and when to expect it shows the difference between your profit and cash position. It should display how much cash you have now, where it’s going, where it will come from and a schedule for each activity.

Income projections: Businesses can use their sales forecasts to estimate how much money they are on track to make in a given period, usually a year. This income projection is calculated by subtracting anticipated expenses from revenue. In some cases, the income projection is rolled into the P&L statement.

Assets and liabilities: Assets and liabilities appear on the business’s balance sheet. Assets are what a company owns and are typically divided into current and long-term assets. Current assets can be converted into cash within a year and include stocks, inventory and accounts receivable. Long-term assets are tangible or fixed assets designed for long-term use, such as furniture, fixtures, buildings, machinery and vehicles.

Liabilities are business obligations that are also classified as current and long-term. Current liabilities are due to be paid within a year and include accrued payroll, taxes payable and short-term loans. Long-term liabilities include shareholder loans or bank debt that mature more than a year later.

Break-even analysis: The break-even point is how much a business must sell to exactly cover all of its fixed and variable expenses, including COGS, salaries and rent. When revenue exceeds expenses, the business makes a profit. The break-even point is used to guide sales revenue and volume goals; determination requires first calculating contribution margin , which is the amount of sales revenue a company has, less its variable costs, to put toward paying its fixed costs. Businesses can use break-even analyses to better evaluate their expenses and calculate how much to mark up its goods and services to be able to turn a profit.

Four Steps to Create a Financial Plan for Your Small Business

Financial plans require deliberate planning and careful implementation. The following four steps can help small businesses get started and ensure their plans can help them achieve their goals.

Create a strategic plan

Before looking at any numbers, a strategic plan focuses on what the company wants to accomplish and what it needs to achieve its goals. Will it need to buy more equipment or hire additional staff? How will its goals affect cash flow? What other resources are needed to meet its goals? A strategic financial plan answers these questions and determines how the plan will impact the company’s finances. Creating a list of existing  expenses  and assets is also helpful and will inform the remaining financial planning steps.

Create financial projections

Financial projections should be based on  anticipated expenses and sales forecasts . These projections look at the business’s goals and estimate the costs needed to reach them in the face of a variety of potential scenarios, such as best-case, worst-case and most likely to happen. Accountants may be brought in to review the plan with stakeholders and suggest how to explain the plan to external audiences, such as investors and lenders.

Plan for contingencies

Financial plans should use data from the cash flow statement and balance sheet to inform worst-case scenario plans, such as when incoming cash dries up or the business takes an unexpected turn. Some common contingencies include keeping cash reserves or a substantial line of credit for quick access to funds during slow periods. Another option is to produce a plan to sell off assets to help break even.

Monitor and compare goals

Actual results in the cash flow statement, income projections and relevant business ratios should be analyzed throughout the year to see how closely real-life results adhered to projections. Regular check-ins also help businesses spot potential problems before they can get worse and inform course corrections.

Three Questions Your Financial Plan Should Answer

A small business financial plan should be tailored to the needs and expectations of its intended audience, whether it is potential investors, lenders, partners or internal stakeholders. Once the plan is created, all parties should, at minimum, understand:

How will the business make money?

What does the business need to achieve its goals?

What is the business’s  operating budget ?

Financial plans that don’t answer these questions will need more work. Otherwise, a business risks starting a new venture without a clear path forward, and decision-makers will lack the necessary insights that a detailed financial plan would have provided.

Improve Your Financial Planning With Financial Management Software

Using spreadsheets for financial planning may get the job done when a business is first getting started, but this approach can quickly become overwhelming, especially when collaborating with others and as the business grows.

NetSuite’s cloud-based financial management platform simplifies the labor-intensive process through automation. NetSuite Planning and Budgeting automatically consolidates real-time data for analysis, reporting and forecasting, thereby improving efficiency. With intuitive dashboards and sophisticated forecasting tools, businesses can create accurate financial plans, track progress and modify strategies in order to achieve and maintain long-term success. The solution also allows for scenario planning and workforce planning, plus prebuilt data synchronization with NetSuite ERP means the entire business is working with the same up-to-date information.

Whether a business is first getting started, looking to expand, trying to secure outside funding or monitoring its growth, it will need to create a financial plan. This plan lays out the business’s short- and long-term objectives, details its current and projected finances, specifies how it will invest its resources and helps track its progress. Not only does a financial plan guide the business along its way, but it is typically required by outside sources of funding that don’t invest or lend their money to just any company. Creating a financial plan may take some time, but successful small businesses know it is well worth the effort.

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Small Business Financial Plan FAQs

How do I write a small business financial plan?

Writing a small business financial plan is a four-step process. It begins with creating a strategic plan, which covers the company’s goals and what it needs to achieve them. The next step is to create financial projections, which are dependent on anticipating sales and expenses. Step three plans for contingencies: For example, what if the business were to lose a significant client? Finally, the business must monitor its goals, comparing actual results to projections and adjusting as needed.

What is the best financial statement for a small business?

The income statement, also known as the profit and loss (P&L) statement, is often considered the most important financial statement for small businesses, as it summarizes profits and losses and the business’s bottom line over a specific financial period. For financial plans, the cash flow statement and the balance sheet are also critical financial statements.

How often should businesses update their financial plans?

Financial plans can be updated whenever a business deems appropriate. Many businesses create three- and five-year plans and adjust them annually. If a market experiences a large shift, such as a spike in demand or an economic downturn, a financial plan may need to be updated to reflect the new market.

What are some common mistakes to avoid when creating a small business financial plan?

Some common mistakes to avoid when creating a small business financial plan include underestimating expenses, overestimating revenue, failing to plan for contingencies and adhering to plans too strictly when circumstances change. Plans should be regularly updated to reflect real-world results and current market trends.

How do I account for uncertainty and potential risks in my small business financial plan?

Small businesses can plan for uncertainty by maintaining cash reserves and opening lines of credit to cover periods of lower income or high expenses. Plans and projections should also take into account a variety of potential scenarios, from best case to worst case.

What is a typical business financial plan?

A typical business financial plan is a document that details a business’s goals, strategies and projections over a specific period of time. It is used as a roadmap for the organization’s financial activities and provides a framework for decision-making, resource allocation and performance evaluation.

What are the seven components of a financial plan?

Financial plans can vary to suit the business’s needs, but seven components to include are the income statement, operating income, net income, cash flow statement, balance sheet, financial projections and business ratios. Various financial key performance indicators and a break-even analysis are typically included as well.

What is an example of a financial plan?

A financial plan serves as a snapshot of the business’s current standing and how it plans to grow. For example, a restaurant looking to secure approval for a loan will be asked to provide a financial plan. This plan will include an executive summary of the business, a description and history of the company, market research into customer base and competition, sales and marketing strategies, key performance indicators and organizational structure. It will also include elements focusing on the future, such as financial projections, potential risks and funding requirements and strategies.

Financial Management

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Small Business Financial Management: Tips, Importance and Challenges

It is remarkably difficult to start a small business. Only about half stay open for five years, and only a third make it to the 10-year mark. That’s why it’s vital to make every effort to succeed. And one of the most fundamental skills and tools for any small business owner is sound financial management.

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Entrepreneurs Gateway

The 5 (MUST HAVE) Elements of a Successful Financial Plan

The (step by step) guide of what to include in your financial business plan.

  • EntrepreneursGateway.com Team
  • November 4, 2018

putting together business plan financials

#1 The Financial Plan 'Must Haves'

No need to be a financial guru or an accountant to include a financial plan.

Ready to start?

In this article, we’ll provide you with a complete breakdown of what needs to be included in your financial section.

The good news is:

You don’t have to be a financial Guru or an accountant to include a Financial Plan!

By following our steps, you will be able to understand the financial section of your plan, present it with confidence…

And keep a close eye on your bottom line!

putting together business plan financials

This article is part of the Business Planning Hub , where you’ll find lots of guides and resources to help you create the perfect business plan!

Table of Contents

putting together business plan financials

I know that the financial plan can feel like the most intimidating part of putting a business plan together.

Like many other business owners, you may not have a degree in accounting or have gone to business school.

Well, this article will teach you all there is to know about the financial element of your business plan, as well as showing you what you need to include!

Ready? Let’s go.

putting together business plan financials

Getting started

To start with, if you are looking for funding, you need to include the following information :

  • The current funding requirement.
  • Any funding that may be required over the next five years.
  • An outline of what you need funding for exactly – such as capital expenditure, debt retirement, acquisitions, working capital… Whatever that is, you must list it in this section.
  • Future strategical plans for the business. This is an extremely important factor for a potential future creditor, as it will impact your ability to be able to ensure repayment of the loan. This could include a buyout, a debt repayment plan, selling the business or being taken over.

putting together business plan financials

When putting together a funding requirement, you must include what amount is necessary at the present time and what amount will be required in the future . Outline the terms that would be favorable, along with the type of funding (e.g., debt, equity) and the time period that it will apply to.

Historical and prospective financial information will also be required, which moves on to the next part of the plan which is financial projections.

Financial Projections

Before tackling the financial projections, the required market needs to be analyzed thoroughly. This enables the objectives to be set out clearly and in an organized fashion.

Resources can then be allocated efficiently, which demonstrates a good thought process. 

When putting together a business plan package there are essential financial statements which must be included; these are as follows:

putting together business plan financials

Historical Financial Data   

For those who own an established business, it will be necessary to provide an outline of the company’s historical performance . How long the company has been in business for will impact what amount of data is required. Usually, creditors will ask for three to five years.

Included in the financial data will be balance sheets , the company’s income statements , along with cash flow statements for each year that the company has been trading (usually three to five years will suffice).

Another factor that will be of interest to a creditor will be any collateral within the business that can be used to secure the loan, irrespective of the stage that the business is at.

putting together business plan financials

Financial Forecast Data     

Whether a business is in the start-up phase or is continually growing, it will be necessary to provide the future forecasted financial data . Generally, a creditor will want to see what direction the company will be moving in within the next five years.

All five years’ projections should include balance sheets , cash flow statements , capital expenditure budgets , and forecasted income statements . 

The first year’s projections will be more detailed , and forecasts should be on a monthly or quarterly basis. For years two through to five projections can be quarterly or yearly.

It is important that the projected forecasts match the funding required . Potential creditors will be looking out for any inconsistencies.

Any assumptions that have been made within the projections should be justified and summarised so that a potential creditor will not be left with any niggling doubts.

The final section of the financial projections should include a brief summary of all the overall financial information given. This can be illustrated with graphs which could include ratio and trend analysis’.

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#2. Cash Flow Statement

This is also referred to as a ‘ statement of cash flows ’ and gives you an indication of the amount of cash that has come in, how much cash has been paid out, and what cash is left at the end (typically per month).

A word of warning…

This sounds like your sales, your expenses, and your profits…

putting together business plan financials

Say, you were to invoice a client and they didn’t pay by the date it was due. What happens if you’re late paying your own bills?

These aren’t shown in your Income Statement , but will be shown in the cash flow statement .

This statement is just as important as any other statement. Your business needs cash to survive!

You will have a tough time if you are not sure how much cash is in the bank, where the cash is coming from, or going to, and when!

Your cash flow statement lays all of this out. A business plan is not complete without one. And, unless you can lay out this information for your investors to see, they won’t be lending you anything!

putting together business plan financials

Having a thorough understanding of just how much cash your business has, where it comes from, and where it’s going ensures you’ll have a healthy business. Your cash flow statement outlines the difference with what your income statement shows as income (this is your profit) and the actual CASH position of the business.

A business can still be profitable but not have sufficient cash in the bank to pay any expenses.

It is also possible for a business NOT to be profitable, and yet still have cash in the bank for many months, which then gives you a bit more time for you to turn the business around.

This is why it is critical that you understand your financial statement.

Understanding accrual accounting…

putting together business plan financials

In accounting, there are two methods .

Cash Method of Accounting:

This is where you account just your sales and expenses when they happen. You don’t necessarily worry about matching your expenses to a sale (or vice-versa).

Accrual Method of Accounting:

This is where you account for both your sales and expenses in tandem. For example, you get a large pre-order for one of your products. You would hold off accounting for all of the pre-order sales revenue until you had started to manufacture and deliver the product.

putting together business plan financials

When you match revenue with its related expenses, it’s known as the ‘matching principle’ . This is what accrual accounting is all about.

Using the cash method means that your cash flow and your profit and loss statement will be very similar.

Yet, the accrual method gives a much better idea of how exactly your business is operating . It would also be a good idea to switch to this method if you haven’t already.

Switch to the accrual accounting method and get a better sense of how your business is operating – Check out The Ultimate Business Plan Guide! Tweet

putting together business plan financials

So, you want to know why….

OK, well let’s pretend you run an outdoor activity center . You could receive a payment from a customer in April, but they aren’t coming to visit until July. If you were to use the accrual method, this wouldn’t be recognized until you’ve actually performed the service. This means that the revenue and the expense would not show up until July.

For a more accurate way to determine how your business is working, the accrual accounting method is definitely the best way to go!

Click on the download button to get your FREE Cash Flow template.

putting together business plan financials

#3. Sales Forecast

Your Sales Forecast  deals with your projections of how much you think you will sell over a specific time (1 to 3 years, for example).

This element of your business plan is crucial , especially if you have investors involved. It needs to be a constant part of your business planning processes.

You need to create your sales forecast so it’s consistent with the sales number which is used in your Profit & Loss Statement.

Unfortunately, with sales forecasts , the formula of one size fitting all, doesn’t apply. All businesses have different needs, so how you choose to organize and segment your forecast will depend upon your type of business and just how thorough you want to be in tracking your sales.

putting together business plan financials

Here are some helpful questions you can ask yourself:

  • How many customers do you think you’ll have?
  • What do you think you will charge them?
  • How often do you want to charge them?

It’s your choice as to how detailed your sales forecast is . You can simply summarize, if you want. But it’s important to have something in your business plan.

It’s useful for both planning and marketing if you break your sales forecasts into sections .

For example, for a restaurant owner, this could mean separating out your forecasts for both your lunch and dinner sales. For a health club, it could be useful to differentiate forecasts into single, joint or family memberships, sales from the club shop, restaurant etc. Or you could simply forecast every product individually.

Below is an example of the Sales forecast over one-year and five year period for an Ecommerce Store :

putting together business plan financials

#4 Income statement or Profit & Loss Statement

An Income Statement of your profit & loss statement explains simply just how your company has made a profit (and in some circumstances, has made a loss).

It really is that simple…

putting together business plan financials

In the table, it lists all of the revenue streams as well as your expenses. At the bottom, it calculates the total net profits or losses.

It’s a vital report and one you should be able to understand.

A typical income statement (P&L) should include:

  • Revenue (this is also referred to as your sales)
  • Your “COGS” ( Cost Of Goods Sold) or “cost of sale” – some companies might not have these (for example, services companies)
  • Gross margin , your revenue minus your costs of goods sold.

These components are the pillar of your business model – how you’ll make your money .

You also need to include a list of the operating expenses for your business . These are the costs of running your company (i.e., costs which aren’t incurred from making a sale). Examples are rent, insurance, etc.

To get your Operating Income, you simply minus your operating expenses from your gross margin:

putting together business plan financials

Gross Margin – Operating Expenses = Operating Income

Your operating income is typically equivalent to your “earnings before interest, taxes, depreciation, and amortization” (EBITDA). This is how much profit you have made before any tax or accounting obligations.

Your “bottom line” – which is your net income, is found right at the bottom of your income statement. This is your EBITDA minus the “ITDA”.

Operating Income – Interest, Taxes, Depreciation, and Amortization Expenses = Net Income.

Click on the download button to get your FREE Profit & Loss template.

putting together business plan financials

Below is an example of a profit and loss statement for an   Ecommerce  store:

putting together business plan financials

#5 The Balance Sheet

putting together business plan financials

The concept of a balance sheet is relatively straightforward. It is used to determine if the business has more assets rather than liabilities and in order to be financially healthy they must balance out. It will also highlight the company’s net worth, and usually, this information is gathered on a quarterly basis.

Both liabilities and assets are organized by time on a balance sheet. So, with assets, for example, the quicker that the business can turn an asset into cash, the higher it will place on the balance sheet. However, with liabilities, the quicker something needs paying, the higher up the item is placed. 

Assets = Liabilities + Equity

The total of your liabilities + total of your equity = Total of your assets.

Below you can see an example of an ecommerce store balance sheet:  

putting together business plan financials

Click on the download button to get your FREE Balance Sheet template.

putting together business plan financials

#6 How to put together your Personnel Plan

This is especially important if you are looking to have a lot of labor costs, rather than a solo entrepreneur.

It’s important to understand how your staff will affect your business.

It’s a great idea to list out any entire departments or offices so you can see exactly which department is costing the most.

The below example Personnel Statement is from an Advertising Agency Business Plan : 

putting together business plan financials

#7 Conclusion

I can’t stress enough how important this section is when it comes to producing your Business Plan.

You must understand it!

You can always hire a bookkeeper or an accounting firm to produce these figures for you, but you need to be able to understand them as they are key to the growth of your business.

If you’re also sitting in front of an investor and are able to answer questions about your numbers, your chances of securing any funding is going to be much higher.

Additional Resources

Why not check out our other resources to help with your financial plan today!

  • How to do a Sales Forecast
  • What is a Balance Sheet and why is it important in your Business Plan?
  • How to Build a Profit and Loss Statement (Income Statement)
  • How to Forecast Cash Flow
  • The Difference Between Cash & Profits
  • Balance Sheet Template [Free Download]
  • Cash Flow Template [Free Download]
  • Profit and Loss Template [Free Download]

Now, over to you...

Now I’d love to hear from you:

Are you still unsure of which business plan you need?

Maybe you have written a business plan and would like us to review it?

Leave any comments below and I will be sure to answer as soon as they come in!

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putting together business plan financials

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How to create a financial plan for a new business

Table of Contents

Creating a financial plan for a new business: the essential steps

Form a strategy, financial objectives, pricing and sales strategy, starting budget, create realistic projections, income projections, cash flow projections, sales forecast, outline your funding needs , plan for the unexpected, check in with your plan, financial planning for new business success , track your financial plan with a clever app.

When you start a new business, your success depends on how you handle your money. With a clear and realistic financial plan, you can prepare for the long run with strong spending decisions and earning predictions.

Your financial plan helps you develop your business’s money goals and expectations . It’s crucial in making your money work for you. 

But if you’ve never written a financial plan before, you might wonder where to start. We can help with that.   

This guide covers how to create a financial plan for a new business, including:

  • Forming a strategy 
  • Creating projections 
  • Outlining funding needs
  • Planning for the unexpected 
  • Checking in with your plan

See also : Why you need financial planning in business .

With a well-developed financial plan, you can approach your business with intention. Let’s go over what you should include and how to do so. 

Your financial strategy is the overarching force that drives your plan. It answers key questions about the why and how of your business.

Start your financial strategy by listing the main objectives for your new business finances . You might come up with short, medium, and long term objectives to guide you in the right direction. 

First, ask yourself which general goals you want to focus on, such as becoming profitable. Then, turn this goal into a specific and achievable objective. For example, you might plan to earn X sales in X months to reach profitability . 

As you write the strategy, try coming up with five to ten main objectives that are realistic for your new business. 

Your pricing strategy can impact how many sales you earn for your business. So, how might you price your products to achieve your financial objectives?

For example, you could use a:

  • Penetration pricing strategy – offering lower prices than average at the start to draw in customers 
  • Competitive pricing strategy – listing your products above, below, or level to average pricing to give them a competitive edge
  • Premium pricing strategy – setting your prices higher than normal to suggest value or exclusivity 

On top of this, consider your sales strategy or what methods you’ll use to draw in customers and earn revenue. For example, you might use a reward system to encourage return customers . 

Your starting budget is another essential part of your financial strategy. 

It outlines how much you hope to spend and earn from your business initially . To form a realistic budget, consider your business expenses and how you’ll cover them to remain operational.  

To learn more, check out our article on budgeting for starting a business . 

Projecting the outcomes of your business efforts help you plan more realistically . Plus, they can convince potential investors your business is viable, and you’re worth giving money to. 

As you start your business, you’ll want to know how much you might earn in the first month, quarter, and year . This knowledge lets you predict how much money you could take home at the end of the day. 

To learn more about this, check out our article on how to create a financial forecast for a new business . 

Your cash flow forecast can help you predict the cash entering and exiting your business over a given time . This estimate is essential to determining how you’ll cover regular expenses. 

You might also strategise how to bring in the necessary cash regularly, such as following up on late invoices or promoting cash revenue. 

A sales forecast uses market size and demand to estimate how many customers you could draw in at the start . 

Creating one for your business helps predict profitability, sales trends, and create realistic expectations.  

To learn more, read our article on how to write a sales forecast .

You’ll likely need cash to get your business going. In this section, cover how much you’ll need to start, including startup costs, operational expenses, and a cushion before profit . 

You may try self-funding your business to avoid debts or liabilities . If so, outline a savings or funding plan. For example, you might crowdfund your startup idea. 

If you need external funding, there’s a few routes you can take. You might choose to seek: 

  • A business loan – The UK government offers startup loans for businesses. You could also seek a small business loan from a bank like Barclays .
  • An investor – If you create a convincing proposal, people may invest in your company in exchange for a piece of the business. 
  • Grants – Some government grants are available for startups , which could help you avoid taking on debt.
  • Family and friends – You might want to approach people you know well with your business idea as they could invest or offer you a personal loan.

A financial plan for a new business helps you prepare for the future. Still, there are bound to be unpredictable situations. So, in this section, consider potential risks to your finances. 

Preparing for the unexpected will help you avoid irreversible consequences that can harm your business . 

For example, you might want to develop an emergency fund and business continuity plan , so you’re ready to react to potential disruptions.  

Once you complete your financial plan, be sure to monitor its success. This way, you’ll catch yourself if you start to veer off the path. Then, it’ll be easier to correct yourself or create more realistic expectations before it’s too late . 

The plan acts as a guide to your finances, so regularly referring to it and updating it will help you keep your finances in order . 

Writing a financial plan for your new business lets you get on top of your finances early on. As a result, it’ll be far easier to build a profitable business that’s prepared to grow . 

In fact, planning is essential for every part of your operations. So, next, you might want to check out our article on how to write a business plan . 

As you put your financial plan together, you’ll need tools that help you track your progress, like Countingup.

Countingup is the business account and accounting software in one app . It automates time-consuming bookkeeping admin for thousands of self-employed people across the UK. 

Save yourself hours of accounting admin so you can focus on growing your business. 

Start your three-month free trial today. 

Apply now .

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How to Write a Convincing Business Plan for Investors

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Noah Parsons

9 min. read

Updated November 29, 2023

Raising money for your business is a major effort. You need lists of investors to reach out to and you need to be prepared for your investor meetings to increase your chances of getting funded . You need to practice your pitch and be ready to intelligently answer any number of questions about your business. A key to making this entire process much easier is to invest a little time and write a business plan . It’s true — not all investors will ask to see your business plan. But the process of putting together a business plan will ensure that you’ve thought through every aspect of your business and you’re ready to answer any questions that come up during the fundraising process.

  • Why do investors want to see a business plan?

The business plan document itself isn’t what’s important to investors. It’s the knowledge that you’ve generated by going through the process that’s important. Having a business plan shows that you’ve done the homework of thinking through how your business will work and what goals you’re trying to achieve.

When you put together a business plan, you have to spend time thinking about things like your target market , your sales, and marketing strategy , the problem you solve for your customers, and who your key competitors are . A business plan provides the structure for thinking through these things and documents your answers so you’re prepared for the inevitable questions investors will ask about your business. 

Even if investors never ask to see your business plan, the work you’ve done to prepare it will ensure that you can intelligently answer the questions you’ll get. And, if an investor does ask for your business plan, then you’re prepared and ready to hand it over. After all, nothing could be worse than arriving at an investor meeting and then getting a request for a business plan and not having one ready.

Beyond understanding your business strategy, investors will also want to understand your financial forecasts. They want to know how your business will function from a financial standpoint — what is typically called your “ business model .” They’ll also want to know what it will take for your business to be profitable and where you anticipate spending money to grow the business. A complete financial plan is part of any business plan, so investing a little time here will serve you well. 

  • What do investors want to see in a business plan?

There’s no such thing as a perfect business plan and investors know this. After all, they’ve spent years, and often decades, hearing business pitches, reading business plans, investing in companies, and watching them both succeed and fail. As entrepreneur and investor Steve Blank likes to say, “No business plan survives first contact with a customer.” 

If this is true, then why bother writing a business plan at all? What’s the value of planning and why do investors want them if they know the plan will shortly be outdated?

The secret is that it’s the planning process, not the final plan, that’s valuable. Investors want to know that you’ve thought about your idea, documented your assumptions, and are on track to validate those assumptions so that you can remove risk from your business. 

So what do investors want to see in your business plan? Beyond the typical sections , here are the most important things that investors want to see in your plan.

A vision for the future

Investors, particularly those investing in early-stage startups, want to understand your vision . Where do you see your company going in the future? Who will your customers be and what problems will you solve for them? Your vision may take years to execute — and it’s likely that the vision will change and evolve over time — but investors want to know that you’re thinking beyond tomorrow and into the future.

Product/market fit and traction

Investors want more than just an idea. They want evidence that you are solving a problem for customers. Your customers have to want what you are selling for you to build a successful business and your business plan needs to describe the evidence that you’ve found that proves that you’ll be able to sell your products and services to customers. If you have “traction” in the form of early sales and customers, that’s even better.

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Need funding?

Create a business plan that maximizes your chances of securing funding., funding needed and use of funds.

When you’re pitching investors, you need to know how much you’re asking for. Your financial forecast should help you figure this out. You’ll want to raise enough money to cover planned expenses and cash flow requirements plus some additional funding as a safety net. In addition, you’ll want to specify exactly how you plan on using your investment . In a business plan, this section is often called “sources and uses of investment.”

A strong management team

A good idea is really only a small part of the equation for a successful business. In fact, lots of people have good business ideas — it’s the people that can execute well that generally succeed. Investors will pay a lot of attention to the section of your plan where you talk about your management team because they want to know that you can transform your idea into a successful business. If you have gaps and still need to hire key employees, that’s OK. Communicating that you understand what your needs are is the most important thing.

An exit strategy

When investors give you money to start and grow your business, they are looking to eventually make a return on their investment. This could happen by eventually selling your business to a larger company or even by going public. One way or another, investors will want to know your thoughts about an eventual exit strategy for your business.

  • What documents do investors want to see?

Even if investors never ask for a detailed business plan, your business planning process should produce a few key documents that investors will want to see. Here’s what you need to be prepared to pitch investors:

Cover letter

These days, a lot of fundraising outreach is done over email and you’ll need a concise cover letter that sparks investor interest. Your cover letter needs to be very brief, but describe the problem you’re solving for your target market.

Great cover letters are sometimes in a “story” format that hooks readers with a real-world, relatable example of the problems your customers face and how our product or service The goal of the cover letter isn’t to explain every aspect of your business. It’s just to spark interest and get a meeting with an investor where you’ll have more time to actually pitch your business. Keep your cover letter brief, engaging, and to the point.

If you get an investor meeting, you’ll almost certainly need a pitch deck to present your idea in more detail and showcase your business idea. Your pitch deck will cover the problem you’re solving, your solution, your target market, and key market trends. Read our detailed guide on what to include in your pitch deck here and for inspiration check out our gallery of more than 50 Industry Pitch Deck Examples .

Executive summary and/or one-page plan

You might not get a meeting right away. Your cover letter may generate a request for additional information and this is where a solid executive summary or one-page business plan comes in handy. This document, while still short, is more detailed than your cover letter and explains a bit more about your business in a page or two.

Read more about what goes into a great executive summary and how to build a lone-page business plan.

Financial forecasts

Investors will inevitably want to see your financial forecasts. You’ll need a sales forecast, expense budget , cash flow forecast , profit and loss, and balance sheet . If you have historical results, you should plan on sharing those too as well as any other key metrics about your business. Investors will always look deep under the hood of your business, so be prepared to share all the details of how your business will work from a financial perspective.

  • What to include in your investor business plan

When you put together a detailed business plan for investors, you’ll follow a fairly standard format. Of course, feel free to customize your plan to fit your business needs. Remember: your business plan isn’t about the plan document that you create — it’s about the planning process that helps you think through and develop your business strategy. Here’s what most investor business plans will include:

Executive Summary

Usually written last, your executive summary is an overview of your business. As I mentioned earlier, you might use the executive summary as a stand-alone document to provide investors more detail about your business in a concise form. Read our guide on executive summaries here .

Opportunity

The opportunity section of your plan covers the problem you are solving, what your solution is, and highlights any data you have to prove that people will spend money on what you’re offering. If you have customer validation in any form, this is where you highlight that information.

Market Analysis

Describe what your target market is and key trends that are occurring in this market . Is the market growing? Are buying patterns changing? How is your business positioned to take advantage of these changes? Be sure to spend some time discussing your competition and how your target market solves their problems today and how your solution is superior.

Marketing & Sales Plan 

Most businesses need to figure out how to get the word out and attract customers. Your business plan should include a marketing plan that describes how you’re going to reach your target market and any key marketing initiatives that you’re going to undertake. You should also spend time describing your sales plan, especially if your sales process takes time to close customers.

Milestones / Roadmap

Outline key milestones you hope to achieve and when you plan on achieving them. This section should cover key dates for product development, key partnerships you need to create, and any other important goals you plan on achieving.

Company & Management

Here’s where you describe the nuts and bolts of your business. How is your organization structured? Who is on your team and what are their backgrounds? Are there any important positions that you still need to recruit for?

Financial Plan

As I mentioned, you’ll need to create a profit and loss, cash flow, and balance sheet forecast. Your financial plan should be optimistic, yet realistic. This is a tough balance and your forecast is certain to be wrong, but you need to document your assumptions and plans for the business.

Finally, you can include an appendix for any key additional information you want to share. Product diagrams, additional details on how you deliver your service, or additional research can all be included.

  • What comes next?

Writing a business plan for investors is really about preparing you to pitch your business . It’s quite likely that you’ll never get asked for the actual business plan document. But, the process will prepare you better than anything else to answer any questions investors may have.

Create a business plan that maximizes your chances of securing funding

Content Author: Noah Parsons

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

putting together business plan financials

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Business plan 101: putting together the financial section.

November 21, 2016

Image courtesy of KROMKRATHOG at FreeDigitalPhotos.net

The financial part of your business plan isn’t just for potential funders. It can also guide you as you make decisions for your company and as you decide what the next steps to take are. Our tips will help you put together an accurate and useful financial section.

The Goal of the Financial Section

Typically, the financial section of a business plan contains a best-estimate guess as to where your company is headed financially. You can use your business’ past financial information and accounting to project where your company is headed and where it will be within a certain amount of time. Since the financial part of a business plan is largely hypothetical, you don’t need to be terribly exact. For example, you don’t necessarily have to state that you expect to bring in X dollars on May 15 or that your company will earn Y dollars on June 1.

The goal of the financial projection section is usually to demonstrate to investors that your company has the capability to increase sales and that there is a plan for growth in the works. In the case of investors, they will also want to see that there is an exit strategy in place, so that they can recoup what they put into your business, plus a profit. In the case of lenders, the bank will usually want proof that you will be able to repay your loan.

What Goes Into the Financial Section

The financial part of a business plan usually consists of at least three sections. They are:

  • The income statement
  • The balance sheet
  • The cash flow statement

The income statement shows that your company is bringing in money and how much money it typically brings in or expects to bring in. It’s also sometimes known as an earnings statement or a profit and loss statement. To put together your income statement, you’ll need to know your tax rate information, your gross revenue and your expenses.

A balance sheet compares what your company is bringing in in terms of revenue to what it owes and to what it owns. It gives an investor or lender an idea of the total worth of your company. It lets you see at a glance whether the business’ liabilities are more than its assets and helps you and any potential funders see if your company’s net worth is positive or negative.

Finally, the cash flow statement shows how much cash your company has on hand at a given time and provides a picture of the flow of cash into and out of your company. You can use historical financial data from your business to put together the cash flow statement, looking at your balance sheets and income statements from previous months or years. The cash flow statement gives you an idea of where your funds are coming from and how your company is putting those funds to work.

Reviewing the Financial Section

Your company’s business plan isn’t static. It should change and evolve as your company’s goals and needs evolve. For that reason, it’s essential that your review your financial section from time to time and adjust it as your business’ goals change or as your business’ financial needs change.

To keep the financial part of your business plan accurate, it’s a good idea to look it over and make changes to it on a quarterly, if not monthly basis. You’ll be able to put in actual numbers from the past month or quarter, then use those numbers to more accurately shape your financial projections and statements.

The virtual chief financial officer team at New Direction Capital is available to work one on one with you and your business to help you put together a plan that stands out. Whether you need help with financial section of your business plan or with putting the entire plan together, our team is here to help. Contact us today to learn more!

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putting together business plan financials

Small Business Trends

How to create a financial business plan.

How to Create a Financial Business Plan

A financial business plan is essential to help your small business. These important documents are put together to help your business plan for the future. Make no mistake. This part of your business plan might look like accounting but a financial business plan is designed to look forward.

Here’s how to put one of these plans together.

Important Parts of a Financial Business Plan

First off, it’s important to remember these don’t necessarily follow any kind of sequence. Although they include profit and loss statements, a balance sheet and cash flow statements, you might jump back and forth when you first start putting one of these together.

For example, when you put together a cash flow, the numbers might tell you that you need to go back and rejigger your estimates for expenses and sales.

That said, there are some important benchmarks you’ll need to cover when you’re putting together one of these financial business plans.

Sales Forecast

Using a spreadsheet is the best way to put together a sales forecast. You’ll want to forecast the sales for your small business over the course of three years to attract investors and lenders. For the first year, you want to set up columns for sales monthly. Afterwards, you can go to a quarterly basis for years number two and three.

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Expenses budget.

Putting together and expenses budget will help to balance out your sales forecast. In a nutshell, this will tell you how much money it’s costing to produce what you’re selling. This will have a variety of different categories including leased equipment and utility payments. Of course, you can’t forget other items like payroll and rent as well as depreciation on any equipment that you use.

Cash Flow Statement

When you put the sales forecast and the expenses budget together, you get a cash flow statement.

“The cash flow statement is often overlooked but it provides a good summary of what’s going on in the other financial statements. It tracks the changes in the balance sheet as well as incorporates PL and Equity statement items,” Steven Vertucci, CPA Audit Partner , MaloneBailey, LLP , wrote in an email to Small Business Trends.

This is one of the underpinnings of any financial business plan. It’s the fulcrum that many lenders will look at that you can use to gauge your projected success or failure going forward. The cash flow statement is important to show you where you need to tweak your business model — what you can keep and what needs to be discarded.

It’s based at least partially on all the other elements in your financial plan. Experts suggest that if you have a business that’s been running for a few years, you can use profit and loss statements and balance sheets from the past.

If you’re a start up you need to break down this part of your financial statement into 12-month pieces.

Robert Riordan is a CPA. He also emailed some comments to Small Business Trends on the importance of putting a financial business plan together.

“Learn to go over all the numbers and watch where the expenses are going. Know what a budget is and follow it. Learn how to apply financial ratios to see where your business is going. Try to look at your financial statements every month to see where you are at. Its great information to help you succeed in Business.”

Income Projections

Once you’ve put these pieces of the puzzle together, you can start making some income projections. The idea here is to round up the numbers that you put together in the previous categories. In a nutshell, this is the money that you think your company will make in one year.

It’s important for potential investors, lenders and your own plans as a small business owner.

Projected Balance Sheet

As you’ve probably guessed by now, putting together a good financial business plan is a step-by-step process and it needs to include a projected balance sheet. This is another way that you can cover all the different bases and take educated guesses at your money situation looking forward.

You need to deal with assets and liabilities you haven’t already covered so you can come up with a projected net worth at the end of your fiscal year.

These are all educated and researched guesses about what your money situations going to look like for your small business.  Putting a good financial business plan together gives you a roadmap of the money trends that you can expect.

The idea is to be able to pin down a breakeven point as best as you can. That’s the financial pinnacle where sales equal expenses. If you’re looking for a business loan, investors will be very interested in how all these numbers come together.

Here’s a final piece of advice. Many small businesses put one of these financial plans together and then leave it in a figurative drawer where it’s forgotten. It’s best used as a financial tool and a reference point. In fact, filling in the numbers in some areas like the profit and loss statement monthly and then comparing them to the income projections is a good idea.

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Financials are important for it will let you know if you will make money or not. You’ll want to know how long it will take to get your ROI.

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SaaS Business Plan Template

Written by Dave Lavinsky

Saas Business Plan

SaaS Business Plan

Over the past 20 years, we’ve helped over 10,000 entrepreneurs create successful SaaS (Software as a Service) business plans. This step-by-step guide will show you how to start and grow your SaaS business. You’ll learn how to make a plan that outlines your business goals and how to achieve them. Let’s get started on building your SaaS company today!

Download our Ultimate SaaS Business Plan Template here >

What Is a SaaS Business Plan?

A business plan provides a snapshot of your SaaS business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your business plans.

Why You Need a SaaS Business Plan

If you’re looking to start an SaaS business, or grow your existing SaaS business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your SaaS business in order to improve your chances of success. Your SaaS business plan is a living document that should be updated annually as your company grows and changes.

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How to write a business plan for a saas company.

Your business plan should include 10 sections as follows:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of SaaS business you are operating and the status; for example, are you a startup, or do you have an SaaS business that you would like to grow?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the SaaS industry. Discuss the type of SaaS you are offering. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of SaaS you are offering.

For example, you might offer the following options:

  • Horizontal SaaS – this business model allows big SaaS businesses to serve a varied customer base from a multitude of industries. Services can be expanded to incorporate a variety of software categories.
  • Vertical SaaS – this business model includes solutions that are created for a specific customer type of industry. This software focuses solely on that industry’s needs.

In addition to explaining the type of SaaS you provide, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

  • When and why did you start the business?
  • What milestones have you achieved to date? Milestones could include usability goals you’ve reached, number of new subscriptions, etc.
  • Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the SaaS industry. While this may seem unnecessary, it serves multiple purposes.

First, researching the SaaS industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

saas industry growth outlook

The following questions should be answered in the industry analysis section of your SaaS business plan:

  • How big is the SaaS industry (in dollars)?
  • Is the market declining or increasing?
  • Who are the key competitors in the market?
  • Who are the key suppliers in the market?
  • What trends are affecting the industry?
  • What is the industry’s growth forecast over the next 5 – 10 years?
  • What is the relevant market size? That is, how big is the potential market for your SaaS service. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your SaaS business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: businesses, households, government entities, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of SaaS you offer. Clearly, households would want different products and services, and would respond to different marketing promotions than government entities.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other SaaS services.

Indirect competitors are other options customers may use that aren’t direct competitors. This includes customized software solutions and open source software. You need to mention such competition to show you understand that not everyone who needs software will subscribe with an SaaS company.

With regards to direct competition, you want to detail the other SaaS providers with which you compete. Most likely, your direct competitors will be SaaS providers offering similar solutions.

saas startup competition

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

  • What types of customers do they serve?
  • What types of software do they offer?
  • What is their pricing (premium, low, etc.)?
  • What are they good at?
  • What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

  • Will you provide superior products?
  • Will you provide services that your competitors don’t offer?
  • Will you make it easier or faster for customers to use your products?
  • Will you provide better customer service?
  • Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion.

For a SaaS business plan, your marketing plan should include the following:

Product : in the product section, you should reiterate the type of SaaS business that you documented in your Company Analysis. Then, detail the specific solutions you will be offering. For example, in addition to Customer Relationship Management solutions, will you also offer Email Marketing solutions?

saas marketing plan diagram

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

Place : Place refers to the location of your SaaS company. Document your location and mention how the location will impact your success. For example, is your SaaS production or support office located in the US or in India, etc. Discuss how your location might impact customer attraction or retention.

Promotions : the final part of your SaaS marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

  • Advertising in trade magazines
  • Reaching out to associations that correspond with the industry or industries you are targeting
  • Publishing articles or writing guest posts on relevant blogs
  • Social media marketing
  • Radio and/or TV advertising

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your SaaS business, such as attracting customers, running the customer helpdesk, processing paperwork, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect your 100 th subscription, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth programmer, or when you expect to launch a new solution.  

Management Team

To demonstrate your SaaS business’ ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in SaaS. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in software development or deployment, and/or successfully running small businesses.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

saas sales growth

In developing your income statement, you need to devise assumptions. For example, will you have 10 enterprise subscribers or 500 individual subscribers? And will subscriptions grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $200,000 on building out your SaaS solution, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $200,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

saas startup business costs

Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say a company approached you with a $100,000 customization contract, that would cost you $75,000 to fulfill. Well, in most cases, you would have to pay that $75,000 now for employee salaries, hosting, utilities, etc. But let’s say the company didn’t pay you for 180 days. During that 180 day period, you could run out of money.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing an SaaS business:

  • Location build-out including design fees, construction, etc.
  • Cost of equipment like computers, design and project management software, etc.
  • Payroll or salaries paid to staff
  • Business insurance
  • Taxes and permits
  • Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office design blueprint or location lease.  

Putting together a business plan for your SaaS company is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the SaaS industry, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful SaaS business.  

Sources of Funding for SaaS Businesses

With regards to funding, the main sources of funding for an SaaS business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for an SaaS business is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan.

SaaS Business Plan FAQs

What is the easiest way to complete my saas business plan.

Growthink's Ultimate SaaS Business Plan Template  allows you to quickly and easily complete your Saas Business Plan.

How Big is the SaaS Industry?

The Software as a Service (SaaS) industry in the United States is a significant and rapidly growing sector. As of 2023, the market value of the SaaS industry in the U.S. is approximately $108.4 billion . This industry is expected to continue its growth trajectory, with projections indicating that it could reach a market value of $225 billion by 2025, solidifying the U.S. as the world's largest SaaS market

The SaaS industry in the U.S. has seen remarkable growth over the past decade, driven by the increasing adoption of cloud-based solutions across various sectors. This growth is attributed to the flexibility, scalability, and cost-effectiveness that SaaS solutions offer businesses, ranging from small startups to large enterprises. The U.S. market, being a global leader in technology innovation, plays a pivotal role in the development and proliferation of SaaS products.

Key trends shaping the industry include the integration of artificial intelligence and machine learning, which are enhancing the capabilities and efficiency of SaaS applications. There's also a significant push towards vertical SaaS, providing tailored solutions for specific industries like healthcare, finance, or retail, which require specialized software.

The competitive landscape in the U.S. is robust, with both established players and emerging startups vying for market share. There's a continuous emphasis on innovation, customer experience, and service integration. Security and compliance, especially with regulations like GDPR and HIPAA, are also critical concerns for SaaS providers in the U.S., given the sensitivity of data handled by these applications.

The market is also witnessing a shift in revenue models, with many companies moving away from traditional subscription models to usage-based pricing to cater to a broader range of customers. This shift is a response to the growing demand for more flexible and customer-centric pricing structures.

In terms of challenges, the industry faces issues such as market saturation in some segments, rising customer acquisition costs, and the need for constant technological upgrades. Despite these challenges, the U.S. SaaS industry's outlook remains positive, with continued growth expected, driven by ongoing digital transformation in various sectors and the increasing reliance on cloud-based solutions.

Overall, the U.S. SaaS industry represents a dynamic and vital segment of the tech sector, characterized by rapid innovation, a strong focus on customer needs, and a significant impact on how businesses operate and grow in the digital age.

What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of Saas business you are operating and the status; for example, are you a startup, do you have a Saas business that you would like to grow, or are you operating multiple Saas businesses.

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Table of Contents

What does a loan business plan include?

What lenders look for in a business plan, business plan for loan examples, resources for writing a business plan.

A comprehensive and well-written business plan can be used to persuade lenders that your business is worth investing in and hopefully, improve your chances of getting approved for a small-business loan . Many lenders will ask that you include a business plan along with other documents as part of your loan application.

When writing a business plan for a loan, you’ll want to highlight your abilities, justify your need for capital and prove your ability to repay the debt. 

Here’s everything you need to know to get started.

How much do you need?

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We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

A successful business plan for a loan describes your financial goals and how you’ll achieve them. Although business plan components can vary from company to company, there are a few sections that are typically included in most plans.

These sections will help provide lenders with an overview of your business and explain why they should approve you for a loan.  

Executive summary

The executive summary is used to spark interest in your business. It may include high-level information about you, your products and services, your management team, employees, business location and financial details. Your mission statement can be added here as well.

To help build a lender’s confidence in your business, you can also include a concise overview of your growth plans in this section.

Company overview

The company overview is an area to describe the strengths of your business. If you didn’t explain what problems your business will solve in the executive summary, do it here. 

Highlight any experts on your team and what gives you a competitive advantage. You can also include specific details about your business such as when it was founded, your business entity type and history.

Products and services

Use this section to demonstrate the need for what you’re offering. Describe your products and services and explain how customers will benefit from having them. 

Detail any equipment or materials that you need to provide your goods and services — this may be particularly helpful if you’re looking for equipment or inventory financing . You’ll also want to disclose any patents or copyrights in this section.

Market analysis

Here you can demonstrate that you’ve done your homework and showcase your understanding of your industry, current outlook, trends, target market and competitors.

You can add details about your target market that include where you’ll find customers, ways you plan to market to them and how your products and services will be delivered to them.

» MORE: How to write a market analysis for a business plan

Marketing and sales plan

Your marketing and sales plan provides details on how you intend to attract your customers and build a client base. You can also explain the steps involved in the sale and delivery of your product or service.

At a high level, this section should identify your sales goals and how you plan to achieve them — showing a lender how you’re going to make money to repay potential debt.

Operational plan

The operational plan section covers the physical requirements of operating your business on a day-to-day basis. Depending on your type of business, this may include location, facility requirements, equipment, vehicles, inventory needs and supplies. Production goals, timelines, quality control and customer service details may also be included.

Management team

This section illustrates how your business will be organized. You can list the management team, owners, board of directors and consultants with details about their experience and the role they will play at your company. This is also a good place to include an organizational chart .

From this section, a lender should understand why you and your team are qualified to run a business and why they should feel confident lending you money — even if you’re a startup.

Funding request

In this section, you’ll explain the amount of money you’re requesting from the lender and why you need it. You’ll describe how the funds will be used and how you intend to repay the loan.

You may also discuss any funding requirements you anticipate over the next five years and your strategic financial plans for the future.

» Need help writing? Learn about the best business plan software .

Financial statements

When you’re writing a business plan for a loan, this is one of the most important sections. The goal is to use your financial statements to prove to a lender that your business is stable and will be able to repay any potential debt. 

In this section, you’ll want to include three to five years of income statements, cash flow statements and balance sheets. It can also be helpful to include an expense analysis, break-even analysis, capital expenditure budgets, projected income statements and projected cash flow statements. If you have collateral that you could put up to secure a loan, you should list it in this section as well.

If you’re a startup that doesn’t have much historical data to provide, you’ll want to include estimated costs, revenue and any other future projections you may have. Graphs and charts can be useful visual aids here.

In general, the more data you can use to show a lender your financial security, the better.

Finally, if necessary, supporting information and documents can be added in an appendix section. This may include credit histories, resumes, letters of reference, product pictures, licenses, permits, contracts and other legal documents.

Lenders will typically evaluate your loan application based on the five C’s — or characteristics — of credit : character, capacity, capital, conditions and collateral. Although your business plan won't contain everything a lender needs to complete its assessment, the document can highlight your strengths in each of these areas.

A lender will assess your character by reviewing your education, business experience and credit history. This assessment may also be extended to board members and your management team. Highlights of your strengths can be worked into the following sections of your business plan:

Executive summary.

Company overview.

Management team.

Capacity centers on your ability to repay the loan. Lenders will be looking at the revenue you plan to generate, your expenses, cash flow and your loan payment plan. This information can be included in the following sections:

Funding request.

Financial statements.

Capital is the amount of money you have invested in your business. Lenders can use it to judge your financial commitment to the business. You can use any of the following sections to highlight your financial commitment:

Operational plan.

Conditions refers to the purpose and market for your products and services. Lenders will be looking for information such as product demand, competition and industry trends. Information for this can be included in the following sections:

Market analysis.

Products and services.

Marketing and sales plan.

Collateral is an asset pledged to a lender to guarantee the repayment of a loan. This can be equipment, inventory, vehicles or something else of value. Use the following sections to include information on assets:

» MORE: How to get a business loan

Writing a business plan for a loan application can be intimidating, especially when you’re just getting started. It may be helpful to use a business plan template or refer to an existing sample as you’re going through the draft process.

Here are a few examples that you may find useful:

Business Plan Outline — Colorado Small Business Development Center

Business Plan Template — Iowa Small Business Development Center

Writing a Business Plan — Maine Small Business Development Center

Business Plan Workbook — Capital One

Looking for a business loan?

See our overall favorites, or narrow it down by category to find the best options for you.

on Nerdwallet's secure site

U.S. Small Business Administration. The SBA offers a free self-paced course on writing a business plan. The course includes several videos, objectives for you to accomplish, as well as worksheets you can complete.

SCORE. SCORE, a nonprofit organization and resource partner of the SBA, offers free assistance that includes a step-by-step downloadable template to help startups create a business plan, and mentors who can review and refine your plan virtually or in person.

Small Business Development Centers. Similarly, your local SBDC can provide assistance with business planning and finding access to capital. These organizations also have virtual and in-person training courses, as well as opportunities to consult with business experts.

Business plan software. Although many business plan software platforms require a subscription, these tools can be useful if you want a templated approach that can break the process down for you step-by-step. Many of these services include a range of examples and templates, instruction videos and guides, and financial dashboards, among other features. You may also be able to use a free trial before committing to one of these software options.

A loan business plan outlines your business’s objectives, products or services, funding needs and finances. The goal of this document is to convince lenders that they should approve you for a business loan.

Not all lenders will require a business plan, but you’ll likely need one for bank and SBA loans. Even if it isn’t required, however, a lean business plan can be used to bolster your loan application.

Lenders ask for a business plan because they want to know that your business is and will continue to be financially stable. They want to know how you make money, spend money and plan to achieve your financial goals. All of this information allows them to assess whether you’ll be able to repay a loan and decide if they should approve your application.

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IMAGES

  1. FREE Finance Business Plan Template

    putting together business plan financials

  2. Guide to Putting a Business Plan Together

    putting together business plan financials

  3. How to Create a Financial Plan in 5 Simple Steps

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  4. Financial Planning for Business Owners

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  5. How to Write a Financial Plan for Your Business Plan in 2023

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  6. How To Write A Business Plan: A Comprehensive Guide

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VIDEO

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COMMENTS

  1. How to Write the Financial Section of a Business Plan

    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...

  2. Guide to Writing a Financial Plan for a Business

    , it's important to put together a financial plan that projects future income, cash flow and changes to the balance sheet. The financial plan section often consists mostly of spreadsheets. It's where the business owner presents a paint-by-numbers case that the business will continue to be profitable or, if it's a startup, become profitable.

  3. How to Write a Business Plan, Step by Step

    Steps 2. Describe your company 3. State your business goals 4. Describe your products and services 5. Do your market research 6. Outline your marketing and sales plan 7. Perform a business...

  4. Business Plan Essentials: Writing the Financial Plan

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

  5. How To Write A Business Plan (2024 Guide)

    Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...

  6. Write your business plan

    Executive summary Briefly tell your reader what your company is and why it will be successful. Include your mission statement, your product or service, and basic information about your company's leadership team, employees, and location. You should also include financial information and high-level growth plans if you plan to ask for financing.

  7. Basics Of A Business Plan Financials Section

    The financials section of your business plan tells you and your potential investors, loan providers or partners whether your business idea makes economic sense. Without an impressive financials ...

  8. Business Plan Financial Templates

    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.

  9. How to Write a Business Plan: A Step-by-Step Guide

    Step 1: Write an Executive Summary As with any other piece of writing, this introduction to your plan is the hook. Why should the reader believe in your business? Sell your business and explain why it matters.

  10. How to Write a Financial Plan: Budget and Forecasts

    Financial plan templates and tools. Download and use these free financial templates and calculators to easily create your own financial plan. Download a free detailed sales forecast spreadsheet, with built-in formulas, to easily estimate your first full year of monthly sales. Get a full financial picture of your business with LivePlan's simple ...

  11. Writing a Business Plan—Financial Projections

    The financial section of your business plan should include a sales forecast, expenses budget, cash flow statement, balance sheet, and a profit and loss statement.

  12. How to Write a Business Plan: Beginner's Guide (& Templates)

    Step #3: Conduct Your Market Analysis. Step #4: Research Your Competition. Step #5: Outline Your Products or Services. Step #6: Summarize Your Financial Plan. Step #7: Determine Your Marketing Strategy. Step #8: Showcase Your Organizational Chart. 14 Business Plan Templates to Help You Get Started.

  13. 4 Steps to Creating a Financial Plan for Your Small Business

    Rami Ali | Sr. Product Marketing Manager December 22, 2023 When it comes to long-term business success, preparation is the name of the game. And the key to that preparation is a solid financial plan that sets forth a business's short- and long-term financial goals and how it intends to reach them.

  14. 5 Financial Plan (Must Haves) & How to Write one

    #2. Cash Flow Statement #3. Sales Forecast #4 Income statement or Profit & Loss Statement #5 The Balance Sheet #6 How to put together your Personnel Plan #7 Conclusion Useful Links I know that the financial plan can feel like the most intimidating part of putting a business plan together.

  15. How to create a financial plan for your business

    COGS = Starting inventory costs + additional inventory costs - ending inventory. For example, say your business' inventory costs at the start of the year add up to $200,000. You make $500,000 worth of additional inventory purchases throughout the year and finish with $100,000 worth of inventory at the end of the year.

  16. How To Create A Financial Plan for a New Business

    We can help with that. This guide covers how to create a financial plan for a new business, including: Forming a strategy. Creating projections. Outlining funding needs. Planning for the unexpected. Checking in with your plan. See also: Why you need financial planning in business.

  17. How to Write a Convincing Business Plan for Investors

    Noah Parsons 9 min. read Updated November 29, 2023 Download Now: Free Business Plan Template Raising money for your business is a major effort. You need lists of investors to reach out to and you need to be prepared for your investor meetings to increase your chances of getting funded.

  18. Business Plan 101: Putting Together the Financial Section

    The financial part of a business plan usually consists of at least three sections. They are: The income statement; ... You can use historical financial data from your business to put together the cash flow statement, looking at your balance sheets and income statements from previous months or years. The cash flow statement gives you an idea of ...

  19. How To Write A Successful Business Plan For A Loan

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  20. How to Create a Financial Business Plan

    Sales Forecast Using a spreadsheet is the best way to put together a sales forecast. You'll want to forecast the sales for your small business over the course of three years to attract investors and lenders. For the first year, you want to set up columns for sales monthly. Afterwards, you can go to a quarterly basis for years number two and three.

  21. SaaS Business Plan Template & Step-by-Step Guide [Updated 2024]

    Financial Plan. Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements. ... Putting together a business plan for your SaaS company is a worthwhile endeavor. If you ...

  22. How to write a business plan (with steps and example)

    How to write a business plan. If you want to learn how to write a business plan, consider the following steps: 1. Write a comprehensive executive summary. Also known as a company description, the executive summary explains the business and its goals to partners, investors and lenders.

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    Character. A lender will assess your character by reviewing your education, business experience and credit history. This assessment may also be extended to board members and your management team ...

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