Projections- Step by Step
Step One- General Info Tab
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Enter Company Name
Enter Loan Amount
Enter Cash on hand (capital injection)
Enter interest rate and term
Enter Assumptions
a. Enter the assumptions that the revenue and expenses will be based on. For
example - how many employees at what rate of pay, for how many hours a
week. Give background info on your revenues, such as the average price per
transaction, and how many customers you expect each day or hour of opening.
b. Sometimes expenses may be based on a percent of sales. At other times they
may be based on a flat amount.
Step Two- Projected Cash Flow Tab
1- Enter sales estimates from the assumptions above.
2- Enter inventory, raw materials, and supplies (COGS) as a percent of sales. Generally
COGS will only be inventory.
3- Copy the formula across the row.
4- Expenses – Certain rows are on a fixed budget (ie- Advertising, Accounting, Auto, Fees,
Dues & Subscriptions, Lease, Office Expenses). For these, enter the amount in column B
and it will carry over through the row.
5- Grayed out cells auto-populate from revenue.
6- Interest amount populates from the amortization schedule.
7- Payroll taxes auto-populate as a percent of payroll (15%).
8- Worker’s Comp taxes auto-populate as a percent of payroll (3%).
9- Other- enter any other expense that was not included above.
Step Three- Startup Costs
1- Enter startup costs over the first three months according to the project.
2- Startup costs flow up to the Cash Flow statement.
3- Make sure to enter working capital (should not be more than the w/c allocated in the
total project.
Step Four- Cash Flow
1- Complete the rest of the Cash Flow portion of the statement.
2- Include Owner’s Draw.
3- Principal repayment auto-populates from amortization tab.
4- The business may or may not have much more in capitalized expenses to be included in
the Cash Flow section depending on the nature of the business.
Step Five- Loan Adequacy Review
1- Cell I79 will indicate whether the loan amount is sufficient. If it is a negative number, the
project is undercapitalized.
2- Row 65 will show ending cash balances each month. Make sure each month is positive
or the project is undercapitalized.