Finance

Finance

Financial statements provide you with information to make decisions, therefore it is important that you understand them. The numbers simply represent decisions you have made in your business. Remember: every decision will eventually end up somewhere in your financial statements. The three most important financial statements to include in your business plan are the following:


  • Balance Sheet: shows your assets, liabilities, equity, and how much the business is worth overall at a point in time. This includes forward projections (pro-forma) for 3 years.
  • Income Statement: shows your income, expenses, and whether your company made a profit. This includes forward projections (pro-forma) for 3 years. This is also referred to as the Profit and Loss Statement (P&L Statement).
  • Cash Flow Projection: shows your cash in and cash out and projects whether your business has the cash to pay its bills. This includes forward projections (pro-forma) for 3 years.

Additional financial information to include:
  • Start-up costs
  • Sources and uses of funds
  • Break-even analysis
  • Budgeting projections
  • Assumptions for all projections