Financial statements are a standardized means of communicating business information; however, the most important user of your financial information is you. As an owner and/or manager, you need to be able to utilize financial information to get feedback about decisions you have made, evaluate performance of the business, and identify planning opportunities and needs. If you are starting a business, check out
Step 4 in our Business Start up Guide to determine where you are financially.
For a Start-up Business:
A. Investment Required for Start-up
- Start-up Costs/Needs - Summarize the total estimated expenses needed to launch your business, including what those costs are and how you estimated them. Indicate how much cash is available now, and how much additional investment is needed to cover these initial expenses required to launch your venture.
- Investment Required - Bank Loan/Self - Write an explanation of where you will get the additional cash required for start-up (from yourself, family, friends, other investors, lenders, etc.). Tell what percentage of the money needed will come from owner investment and what percentage will come from borrowed funds.
B. Cash Flow Projections
- Sales and Expense Estimates - Worksheets and Assumptions
- Monthly Cash Flow Projection - Year One - Summarize any assumptions you made in preparing the Cash Flow Projection.
C. Summary of Financial Needs - Explain how much money you will need to borrow or to invest yourself to cover your start-up expenses, fixed asset purchases and to operate the business. Explain how much of the total funds required will come from owner investment and how much from borrowed funds. Then explain where you will get the money. If using borrowed funds, explain how long you will need the money, and how it will be paid back.
For an existing business:
A. Financial Worksheets
- Salaries/Wages & Benefits
- Outside Services
- Insurance
- Advertising Budget
- Occupancy Expense
- Sales Forecasts
- Cost of Projected Product Units
- Fixed Assets
- Growth Expenses
- Miscellaneous Expenses
B. Cash Flow Projections
- Break-Even Analysis - Write a paragraph discussing your break-even analysis. Address why you think the break-even point is realistic.
- Monthly Cash Flow Projections - Year One
- Notes to Cash Flow Projections
- Annual Cash Flow Projections - Years Two and Three - Explain the differences in projections for years 1, 2, and 3 including any assumptions unique to years 2 and 3.
C. Financial Statements - Write a brief statement drawing some conclusions about what these statements are telling you as the financial manager of your business.
- Projected Income Statement
- Balance Sheet
- Statement of Owner's Equity
D. Additional Financial Information
- Summary of Financial Needs - Explain how much money you will need to borrow or to invest yourself to cover your growth expenses, fixed asset purchases and to operate the business. Explain how much of the total funds required will come from owner or outside investment (equity financing) and how much from borrowed funds (debt financing). Then explain where you will get the money. If using borrowed funds, indicate how long you will need the money, and how it will be paid back.
- Existing Debt
- Personal Financial Statement
Does this seem overwhelming? That's why we recommend you take the NxLeveL course delivered through the Idaho SBDC. In the course you will be provided a textbook and workbook. With the instructor and guest speakers, you walk through each portion of the business plan, answer questions, fill out worksheets, and then write a part of the business plan. The instructor reviews your materials and you also have access to no-cost one-on-one consulting. At the end of the course, you have your business plan completed. Check out the
training calendar to find out the schedule for NxLeveL classes in your area.
(Used with permission from the NxLeveL Start-up and Entrepreneurs Workbooks. For more in depth information and personalized assistance, we recommend taking the
NxLeveL course offered through the Idaho SBDC.)