Your financial projections help determine if an idea is sustainable and keeps you on track to financial health as your business matures. It’s an integral part of an overall business plan and consists of three financial statements: cash flow, income, and balance sheet.
What Should I Include In My Financial Projections Section?
- Profit and Loss (P&L) statement: This statement will show your business’s revenue, expenses, and net profit or loss over a given period of time.
- Balance sheet: This statement will show your business’s assets, liabilities, and equity at a given point in time.
- Cash flow statement: This statement will show your business’s cash inflows and outflows over a given period of time.
- Break-even analysis: This analysis will show how much revenue your business needs to generate to cover its costs.
How Do I Write One?
- Hire a temporary business consultant.
- Research. Research. Research.
- Follow DAT & ATBS.
- Use our Owner-Operator Calculator.
This section is important because it provides readers with an idea of the company’s financial health and its ability to generate revenue. When writing the financial projections section of a business plan, it is important to be realistic and honest about the company’s financial situation. How far out do you need to predict your finances? You can always adjust your plan as the industry changes, but you must show you have a plan.