Business Plan Financial Forecasts

It’s easier to do business plan financial forecasts than to run your own business without them.

I believe these three things about startup entrepreneurs, business owners and financials:

  • The essential need-to-know facts about business plan financial forecasts are very important; and
  • They are easy enough to learn; and
  • Bankers, accountants, investors and their analysts expect you to know them and use them correctly.

The sales forecasts, spending budgets, and cash flow in your lean plan are sufficient for running your business well. Use them for monthly review and revisions and keep them up to date.

However, there are many sound business reasons for developing and managing complete formal business plan financial forecasts that comply with accepted financial practices.

reasons for developing and managing complete formal financial projections that comply with accepted financial practices.

There are three standard financial projections: the Projected Profit and Loss (also called Projected Income), Projected Balance, and Projected Cash Flow. This section gives you what you need to know about financials. So it includes:

  • What You Need to Know About Financials: essential principles that matter. Basics of business plan financial forecasts that you can’t do without.
  • The Projected Profit and Loss (also called Projected Income): How to estimate future profits or losses. Develop a standard projected (also called pro-forma) Profit and Loss forecast. It includes sales, costs, and expenses.
  • Projected Balance Sheet: How to estimate future balance sheets. The balance sheet includes assets, liabilities, and capital. Use it to calculate cash flow and cash needs, and future financial positions.
  • Projected Cash Flow: Extremely important. How to prepare and estimate cash flow over time.

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