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Here are the steps to create your financial projections for your start-up.As you develop your business plan, list the key expenditures you will need to make to get your company off the ground and your subsequent costs to operate.Regardless of the funder, you'll need solid financial projections that cover all of the bases. For many, the financial portion of your business plan is its heart.
If you're writing this for an existing business, then these statements will reflect your past business history and current financial situation.
Break your financials down into monthly projections for the first two years and then move to annual projections.
These projections are forecasts of your cash inflows and outlays, income and balance sheet.
They show bankers and investors how you will repay loans, what you intend to do with your money and how you will grow.
And, your potential investors or lenders are reading your plan to see when (or if) you're going to make that money.
So the financials of your plan can certainly be referred to as the heart, the meat, the big enchilada -- insert your own mega metaphor here.Also, create a sales forecast and use it to project anticipated monthly revenues.A careful study of your potential market will help you arrive at realistic numbers.A business plan is a written description of your business's future, a document that tells what you plan to do and how you plan to do it.If you jot down a paragraph on the back of an envelope describing your business strategy, you've written a plan, or at least the germ of one. You start here, today, with certain resources and abilities.What makes up the heart of your business plan is the profit and loss (or income) statement, the balance sheet, and a cash-flow statement.If your business is a startup, these will all be projections, or pro forma statements.Related: 7 Steps to a Perfectly Written Business Plan You can visit our small business encyclopedia to learn more about business plans or our Form Net area to get the necessary forms to get started.Video: What Investors Really Think About Your Business Plan.And you want to get to there, a point in the future (usually three to five years out), at which time your business will have a different set of resources and abilities as well as greater profitability and increased assets.Your plan shows how you will get from here to there.