Startup Financial Plan Template

The purpose of the financial plan is two-fold.

First, you're going to need it if you are seeking investment from venture capitalists, angel investors, or even smart family members. They are going to want to see numbers that say your business will grow-and quickly-and that there is an exit strategy for them on the horizon, during which they can make a profit. Any bank or lender will also ask to see these numbers as well to make sure you can repay your loan.

But the most important reason to compile this financial forecast is for your own benefit, so you understand how you project your business will do. This is a living document. It should be a guide to running your business. And at any particular time you feel you need funding or financing, then you are prepared to go with your documents.

If there is a rule of thumb when filling in the numbers in the financial section of your business plan, it's this: Be realistic. There is a tremendous problem with the hockey-stick forecast really aren't credible. A startling growth trajectory is something that would-be investors would love to see, it's most often not a believable growth forecast. The way you come up a credible financial section for your business plan is to demonstrate that it's realistic. You must break the figures into components, by sales channel or target market segment, and provide realistic estimates for sales and revenue.

A financial plan isn't necessarily compiled in sequence. And you most likely won't present it in the final document in the same sequence you compile the figures and documents. It's typical to start in one place and jump back and forth. For example, what you see in the cash-flow plan might mean going back to change estimates for sales and expenses.

If your business is viable, at a certain period of time your overall revenue will exceed your overall expenses, including interest. This is an important analysis for potential investors, who want to know that they are investing in a fast-growing business with an exit strategy.