A business plan is a roadmap for growing your business. Not only does it help you plan out your venture, but it is required by funding sources like banks, venture capitalists and angel investors.
The body of your business plan describes your company and your strategies for growing it. The financial portion of your plan details the financial implications of your business: how much money you need, what you project your future sales and earnings to be, etc.
Below you will be able to download our free business plan excel template to help with the financial portion of your business plan. You will also learn about the importance of the financial model in your business plan.
Download the template here: Financial Plan Excel Template
How to Finish Your Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less! It includes a simple, plug-and-play financial model and a fill-in-the-blanks template for completing the body of your plan.
What’s Included in our Business Plan Excel Template
Our business plan excel template includes the following sections:
Income Statement: A projection of your business’ revenues, costs, and expenses over a specific period of time. Includes sections for sales revenue, cost of goods sold (COGS), operating expenses, and net profit or loss.
Example 5 Year Annual Income Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Revenues | $368,306 | $402,786 | $440,494 | $481,732 | $526,831 | |
| Total Revenues | $368,306 | $402,786 | $440,494 | $481,732 | $526,831 | |
| Direct Costs | ||||||
| Direct Costs | $10,475 | $10,901 | $11,343 | $11,804 | $12,283 | |
| Total Direct Costs | $10,475 | $10,901 | $11,343 | $11,804 | $12,283 | |
| GROSS PROFIT | $357,830 | $391,885 | $429,150 | $469,928 | $514,547 | |
| GROSS PROFIT % | 97.2% | 97.3% | 97.4% | 97.5% | 97.7% | |
| Other Expenses | ||||||
| Salaries | $58,251 | $60,018 | $61,839 | $63,715 | $65,648 | |
| Marketing Expenses | $0 | $0 | $0 | $0 | $0 | |
| Rent/Utility Expenses | $0 | $0 | $0 | $0 | $0 | |
| Other Expenses | $12,135 | $12,503 | $12,883 | $13,274 | $13,676 | |
| Total Other Expenses | $70,386 | $72,522 | $74,722 | $76,989 | $79,325 | |
| EBITDA | $287,443 | $319,362 | $354,428 | $392,938 | $435,222 | |
| Depreciation | $6,000 | $6,000 | $6,000 | $6,000 | $6,000 | |
| Amortization | $0 | $0 | $0 | $0 | $0 | |
| EBIT | $281,443 | $313,362 | $348,428 | $386,938 | $429,222 | |
| Interest Expense | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | |
| PRETAX INCOME | $273,443 | $305,362 | $340,428 | $378,938 | $421,222 | |
| Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Use of Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Taxable Income | $273,443 | $305,362 | $340,428 | $378,938 | $421,222 | |
| Income Tax Expense | $95,705 | $106,877 | $119,149 | $132,628 | $147,427 | |
| NET INCOME | $177,738 | $198,485 | $221,278 | $246,310 | $273,794 | |
| Net Profit Margin (%) | 48.3% | 49.3% | 50.2% | 51.1% | 52% |
Cash Flow Statement: A projection of your business’ cash inflows and outflows over a specific period of time. Includes sections for cash inflows (such as sales receipts, loans, and investments), cash outflows (such as expenses, salaries, and loan repayments), and net cash flow.
Example 5 Year Annual Cash Flow Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | ||||||
| Net Income (Loss) | $177,738 | $198,485 | $221,278 | $246,310 | $273,794 | |
| Change in Working Capital | ($24,912) | ($2,754) | ($3,025) | ($2,052) | ($3,523) | |
| Plus Depreciation | $6,000 | $6,000 | $6,000 | $6,000 | $6,000 | |
| Plus Amortization | $0 | $0 | $0 | $0 | $0 | |
| Net Cash Flow from Operations | $158,826 | $201,731 | $224,252 | $250,257 | $276,270 | |
| CASH FLOW FROM INVESTMENTS | ||||||
| Fixed Assets | ($30,000) | $0 | $0 | $0 | $0 | |
| Intangible Assets | $0 | $0 | $0 | $0 | $0 | |
| Net Cash Flow from Investments | ($30,000) | $0 | $0 | $0 | $0 | |
| CASH FLOW FROM FINANCING | ||||||
| Cash from Equity | $0 | $0 | $0 | $0 | $0 | |
| Cash from Debt financing | $80,000 | $0 | $0 | $0 | ($80,000) | |
| Net Cash Flow from Financing | $80,000 | $0 | $0 | $0 | ($80,000) | |
| Net Cash Flow | $208,826 | $201,731 | $224,252 | $250,257 | $196,270 | |
| Cash at Beginning of Period | $0 | $208,826 | $410,557 | $634,809 | $885,067 | |
| $208,826 | $410,557 | $634,809 | $885,067 | $1,081,338 |
Balance Sheet: A snapshot of your business’ financial position at a specific point in time. Includes sections for assets (such as cash, inventory, equipment, and property), liabilities (such as loans, accounts payable, and salaries payable), and owner’s equity (such as retained earnings and capital contributions).
Example 5 Year Annual Balance Sheet
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $208,826 | $410,557 | $634,809 | $885,067 | $1,081,338 | |
| Other Current Assets | $31,729 | $34,700 | $37,948 | $40,144 | $43,902 | |
| Total Current Assets | $240,555 | $445,257 | $672,758 | $925,212 | $1,125,241 | |
| Intangible Assets | $0 | $0 | $0 | $0 | $0 | |
| Amortization | $0 | $0 | $0 | $0 | $0 | |
| Net Intangibles | $0 | $0 | $0 | $0 | $0 | |
| Fixed Assets | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 | |
| Accum Depreciation | $6,000 | $12,000 | $18,000 | $24,000 | $30,000 | |
| Net fixed assets | $24,000 | $18,000 | $12,000 | $6,000 | $0 | |
| Preliminary Exp | $0 | $0 | $0 | $0 | $0 | |
| TOTAL ASSETS | $264,555 | $463,257 | $684,758 | $931,212 | $1,125,241 | |
| LIABILITIES & EQUITY | ||||||
| Current Liabilities | $6,817 | $7,033 | $7,256 | $7,399 | $7,634 | |
| Debt outstanding | $80,000 | $80,000 | $80,000 | $80,000 | $0 | |
| Total Liabilities | $86,817 | $87,033 | $87,256 | $87,399 | $7,634 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | $177,738 | $376,224 | $597,502 | $843,812 | $1,117,606 | |
| Total Equity | $177,738 | $376,224 | $597,502 | $843,812 | $1,117,606 | |
| TOTAL LIABILITIES & EQUITY | $264,555 | $463,257 | $684,758 | $931,212 | $1,125,241 |
Download the template here: Business Plan Excel Template
The template is easy to customize according to your specific business needs. Simply input your own financial data and projections, and use it as a guide to create a comprehensive financial plan for your business. Remember to review and update your financial plan regularly to track your progress and make informed financial decisions.
The Importance of the Financial Model in Your Business Plan
A solid financial model is a critical component of any well-prepared business plan. It provides a comprehensive and detailed projection of your business’ financial performance, including revenue, expenses, cash flow, and profitability. The financial model is not just a mere set of numbers, but a strategic tool that helps you understand the financial health of your business, make informed decisions, and communicate your business’ financial viability to potential investors, lenders, and other stakeholders. In this article, we will delve into the importance of the financial model in your business plan.
- Provides a roadmap for financial success: A well-structured financial model serves as a roadmap for your business’ financial success. It outlines your revenue streams, cost structure, and cash flow projections, helping you understand the financial implications of your business strategies and decisions. It allows you to forecast your future financial performance, set financial goals, and measure your progress over time. A comprehensive financial model helps you identify potential risks, opportunities, and areas that may require adjustments to achieve your financial objectives.
- Demonstrates financial viability to stakeholders: Investors, lenders, and other stakeholders want to see that your business is financially viable and has a plan to generate revenue, manage expenses, and generate profits. A robust financial model in your business plan demonstrates that you have a solid understanding of your business’ financials and have a plan to achieve profitability. It provides evidence of the market opportunity, pricing strategy, sales projections, and financial sustainability. A well-prepared financial model increases your credibility and instills confidence in your business among potential investors and lenders.
- Helps with financial decision-making: Your financial model is a valuable tool for making informed financial decisions. It helps you analyze different scenarios, evaluate the financial impact of your decisions, and choose the best course of action for your business. For example, you can use your financial model to assess the feasibility of a new product launch, determine the optimal pricing strategy, or evaluate the impact of changing market conditions on your cash flow. A well-structured financial model helps you make data-driven decisions that are aligned with your business goals and financial objectives.
- Assists in securing funding: If you are seeking funding from investors or lenders, a robust financial model is essential. It provides a clear picture of your business’ financials and shows how the funds will be used to generate revenue and profits. It includes projections for revenue, expenses, cash flow, and profitability, along with a breakdown of assumptions and methodology used. It also provides a realistic assessment of the risks and challenges associated with your business and outlines the strategies to mitigate them. A well-prepared financial model in your business plan can significantly increase your chances of securing funding as it demonstrates your business’ financial viability and growth potential.
- Facilitates financial management and monitoring: A financial model is not just for external stakeholders; it is also a valuable tool for internal financial management and monitoring. It helps you track your actual financial performance against your projections, identify any deviations, and take corrective actions if needed. It provides a clear overview of your business’ cash flow, profitability, and financial health, allowing you to proactively manage your finances and make informed decisions to achieve your financial goals. A well-structured financial model helps you stay on top of your business’ financials and enables you to take timely actions to ensure your business’ financial success.
- Enhances business valuation: If you are planning to sell your business or seek investors for an exit strategy, a robust financial model is crucial. It provides a solid foundation for business valuation as it outlines your historical financial performance, future projections, and the assumptions behind them. It helps potential buyers or investors understand the financial potential of your business and assess its value. A well-prepared financial model can significantly impact the valuation of your business, and a higher valuation can lead to better negotiation terms and higher returns on your investment.
- Supports strategic planning: Your financial model is an integral part of your strategic planning process. It helps you align your financial goals with your overall business strategy and provides insights into the financial feasibility of your strategic initiatives. For example, if you are planning to expand your business, enter new markets, or invest in new technologies, your financial model can help you assess the financial impact of these initiatives, including the investment required, the expected return on investment, and the timeline for achieving profitability. It enables you to make informed decisions about the strategic direction of your business and ensures that your financial goals are aligned with your overall business objectives.
- Enhances accountability and transparency: A robust financial model promotes accountability and transparency in your business. It provides a clear framework for setting financial targets, measuring performance, and holding yourself and your team accountable for achieving financial results. It helps you monitor your progress towards your financial goals and enables you to take corrective actions if needed. A well-structured financial model also enhances transparency by providing a clear overview of your business’ financials, assumptions, and methodologies used in your projections. It ensures that all stakeholders, including investors, lenders, employees, and partners, have a clear understanding of your business’ financial performance and prospects.
In conclusion, a well-prepared financial model is a crucial component of your business plan. It provides a roadmap for financial success, demonstrates financial viability to stakeholders, helps with financial decision-making, assists in securing funding, facilitates financial management and monitoring, enhances business valuation, supports strategic planning, and enhances accountability and transparency in your business. It is not just a set of numbers, but a strategic tool that helps you understand, analyze, and optimize your business’ financial performance. Investing time and effort in creating a comprehensive and robust financial model in your business plan is vital for the success of your business and can significantly increase your chances of achieving your financial goals.
How to Finish Your Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less! It includes a simple, plug-and-play financial model and a fill-in-the-blanks template for completing the body of your plan.
