Financial Data for Business
Plan
Start-Up Expenses
Balance Sheet
Income Statements
Cash Flow Statements
Break-Even Analysis
Financial Write-Up
If a Start-Up Company:
• Detail specific assumptions and
expenditures associated with start-up
costs
o Example: 2 months of office expenses, 2
months of inventory, etc.
o Website Template: www.score.org
• Complete Loan Application in Backoffice
• Include Loan papers in Appendix of
Business Plan
Balance Sheet
Summary of company’s financial condition at a
specific time or pre start-up
• Existing Company:
o Use Balance Sheet information from 2005-06 Annual
Report: April 30, 2006 balances
o May also include projections for future years
• New Company:
o Develop Proposed Balance Sheet for this current year
o May also include projections for future years
Balance Sheet Contents
• Assets: Current (cash, AR, inventory) and Fixed (plant,
fixtures, furniture, equipment)
• Liabilities: Current (AP, taxes) and Long-term Debt (bank
loans, notes payable to stockholders)
• Owner’s Equity/Net Worth: Retained earnings (beginning
& current), Invested capital
NOTE: Liabilities + Owner’s Equity/Net Worth = Assets
Website Templates:www.startupepa.org/bus/fin_plan.html ,
www.score.org
VE website: www.virtualenterprise.org CurriculumAccounting: End of Period Financial Statements and
Lessons-Accounting: Basic Accounting Principles
Income Statement
Accounting of Sales, Expenses, and Net
Profit for a given period
• 3-year Projected Summary (could be ProForma)
o Detail by month for 1st year: Most companies
only operate for 6-7 months (Oct/Nov-April)
o Detail by quarters for 2nd & 3rd years
o Assumptions upon which projections based
Income Statement Contents
•
•
•
•
•
•
Revenue/Income
o Sales
o Cost of Goods Sold, Commissions, etc.
o Gross Profit = Sales – Cost of Goods Sold
Operating Expenses – All associated with running a business
o Examples: Payroll (net), Payroll taxes (federal & state), Rent, Utilities,
Insurance (business, liability, workman’s comp, etc.), Office supplies,
Car expenses, etc.
Operating Income = Gross Profit – Operating Expenses
Income Before Taxes = Operating Income + Interest Earned
Taxes
o Corporate: Federal ~30% of Operating Income; State ~8% of Operating
Income
o Sales Tax, if applicable: State ~7.25%
Net Income (Loss) = Income Before Taxes – All Applicable Taxes
Website Templates: www.score.org, www.startupepa.org/bus/fin_plan.html
VE Website: www.virtualenterprise.org Curriculum – Accounting: End of Period
Financial Statements
Cash Flow Statements
Measure of company’s financial health over a
given period of time
• Equals Cash Receipts – Cash Payments
• Refer back to Income (P&L) Statement as a
guide
• 3-year Projected Summary (Pro Forma)
o Detail by month for 1st year: Most companies only
operate for 6-7 months (Oct/Nov-April)
o Detail by quarters for 2nd & 3rd years
o Assumptions upon which projections based
Cash Flow Contents
•
•
Cash On Hand at beginning of month: Carry over from previous month
Cash Receipts
o Cash Sales
o AR Collections
o Loan Receipt
•
•
•
•
Total Cash Available: Same as total Cash Receipts
Cash Paid Out: All expenses paid out from Income Statement and
Merchandise (Inventory)
Subtotal: Same as total Cash Paid Out
Other Cash Out
o Loan Principle Payment
o Capital Purchases
o Other Start-up Costs
•
•
Total Cash Paid Out = Subtotal + Other Cash Out
Cash Position (end of month) = Total Cash Available – Total Cash Out
Website Templates: www.score.org , www.startupepa.org/bus/fin_plan.html
Break-Even Analysis
Tool used to determine when company will cover all expenses & begin
to make profit
• Use Start-Up costs & assumptions
• Use expenses from Income Statement
o Fixed Costs - same month to month, like rent
o Variable Costs - change as volume of business changes, like inventory;
expressed as % of sales
• Provide information needed to generate revenue to pay expenses to
run company
• Reached when revenue = all fixed and variable expenses
Website Templates: www.startupepa.org/bus/fin_plan.html,
www.score.org
Financial Write-Up
• Explain the financial documents
• Interpret/Analyze the financial documents
• Justify all necessary figures as they apply to
your business and plan
• Explain and/or justify any projections that
support your plan, if necessary
o
o
o
o
Investment
Risks Identified
Risks Addressed
Solutions Proposed