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What Are Business Plan Financial Projections
Business plan financial projections, also known as financial forecasting, are essential to any successful business plan. This is because they provide a realistic estimate of the financial position of a business at a future date. Projections can range from short-term projections, such as the next three months, to long-term projections, such as the next five years.
The business plan with financial projections sample includes the income statement, balance sheet, and cash flow statement estimates. They are used to project future performance, identify future financial needs, and determine the company’s ability to meet those needs.
The most basic financial projection is a forecast of revenues and expenses in a finance business plan. This is often called a pro forma income statement and is used to project how much money the business will make or lose in the upcoming period. The pro forma income statement includes estimated revenues, expenses, and profits. It also provides information about the business’s expected capital investments, such as the purchase of new equipment or additional inventory.
The payday loan business plan balance sheet projection provides information about the company’s assets, liabilities, and net worth. This is used to estimate the company’s financial position at a future date. It includes information about the company’s current assets, such as cash, accounts receivable, and inventory, as well as projected investments in the company’s future. This is important for forecasting the company’s ability to meet its future financial obligations.
The cash flow statement is used to indicate the company’s cash flow. It is essential for forecasting the company’s ability to meet its short-term financial needs. This statement includes information about the company’s cash inflows and outflows, such as sales, expenses, and investments.
In addition to the three primary financial projections, it is essential to include assumptions about the business environment. These assumptions include the expected growth rate of the industry, the expected impact of competitors, and the expected costs of doing business. These assumptions help to provide a more accurate picture of the expected financial results of the business.
2. What Are Financial Projections Used For
Financial projections are used to assess the financial health of a business and its potential for success. Financial projections help lenders and investors evaluate the risk associated with lending or investing in a business and assess the potential return on their investment. Management can also use financial projections to assess the company’s performance and make decisions about investments, operations, and strategies.
They can be used to develop budgets and plan for future growth and expansion. The financial advisor business plan financial projections can provide a snapshot of a company’s current financial state, as well as help to identify potential opportunities and risks. They are an essential tool in the decision-making process of any business as they help with financial projections for the business plan.
3. Components of Financial Projections for Business Plan
- Important Assumptions: These are the assumptions on which the financial projections are based. The holding company business plan includes the current interest rate, long-term interest rate, and tax rate.
- Break-even Analysis: This is a financial analysis that shows when the business will begin to make a profit. It takes into account fixed costs, variable costs, and revenue.
- Projected Profit and Loss: This is an estimate of the business’s income and expenses over a certain period. It can help to make decisions about pricing, marketing, and other operational strategies.
- Projected Cash Flow: This shows the expected inflows and outflows of cash over a certain period of time. It can help identify potential financing needs and how much cash will be available for investments and expansion.
- Projected Balance Sheet: This is an estimate of the business’s financial position at a particular moment in time, and it is necessary for a business plan for investors. It looks at the assets, liabilities, and equity of the business.
- Business Ratios: These are comparison metrics that measure the performance of a business. They can help to identify areas of strength and weaknesses, as well as compare the performance of the business to that of similar businesses.
4. How to Do Financial Projections for a Business Plan
financial projections are essential for any startup business plan. They provide an estimate of the future performance of a business and form the basis for the budgeting process to know how to come up with financial projections for your business plan. Financial projections for a trucking business should include important assumptions, a break-even analysis, projected profit and loss statements, cash flows, balance sheets, and business ratios. The OGS Capital business plan comes with 3 years of financial projections, and 1st year is detailed by month.
Important Assumptions
When making financial projections, it is important to make reasonable and achievable assumptions. Considering the current market conditions and the company’s competitive position is important. It is also important to consider the company’s historical performance and any changes that may have occurred recently. At OGS Capital our experts know how to create financial projections for a successful business plan.
These assumptions include the size of the fleet, the cost of fuel, the cost of labor, and the expected demand for trucking services. Other assumptions should include the cost of insurance, the cost of repairs and maintenance, and any applicable taxes. These assumptions for projected turnover in a business plan will provide the basis for the projections and it is important that your business plan projections should be as realistic as possible.
The examples of financial projections for a business plan for a trucking business company are based on the following assumptions:
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 7.21% | 7.21% | 7.29% |
| Long-term Interest Rate | 7.25% | 7.25% | 7.50% |
| Tax Rate | 23.03% | 23.03% | 23.09% |
| Other | 0 | 0 | 0 |
Brake-even Analysis
The break-even analysis is an important component of financial projections. This analysis is used to determine the point at which the business will start to make a profit. This involves calculating the total fixed costs of running the business and the total variable costs, such as fuel and labor.
The break-even point can be calculated by dividing the fixed costs by the average price per unit of service. Once the break-even point is determined, the business can use this point to set goals for profitability.
For a trucking business, the break-even analysis would consider the fixed costs associated with operating the business, such as maintenance, fuel, and insurance. It is also important to consider variable costs, such as driver costs and customer demand.
The following is a breakdown of the trucking business company’s fixed and variable costs:
A monthly break-even analysis of a trucking business company is shown in the following table.
| Break-Even Analysis | |
| Monthly Units Break-even | 5558 |
| Monthly Revenue Break-even | $131,857 |
| Assumptions: | |
| Average Per-Unit Revenue | $234.00 |
| Average Per-Unit Variable Cost | $0.71 |
| Estimated Monthly Fixed Cost | $169,200 |
Projected Profit and Loss
The profit and loss projection for business plan statement is used to calculate the projected income and expenses of the business. This business plan financial forecast statement should include all the fixed and variable costs associated with running the trucking business and any other expected income and expenses. The profit and loss statement will provide an estimate of the net income for each month.
For a trucking business plan with projections, the key items on the projected profit and loss statement include revenue from freight and related services, operating expenses such as fuel and maintenance, and capital expenditures.
A trucking business will make the following profits and losses.
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $13,522,150 | $16,626,836 | $20,444,357 |
| Direct Cost of Sales | $13,342,460 | $15,557,308 | $17,315,284 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $13,342,460 | $15,557,308 | $17,315,284 |
| Gross Margin | $179,690 | $1,069,527 | $3,129,073 |
| Gross Margin % | 1.33% | 6.43% | 15.31% |
| Expenses | |||
| Payroll | $472,000 | $519,200 | $571,120 |
| Sales and Marketing and Other Expenses | $133,000 | $136,000 | $138,000 |
| Depreciation | $2,100 | $2,200 | $2,400 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $2,800 | $2,900 | $3,000 |
| Insurance | $2,100 | $2,100 | $2,100 |
| Rent | $3,400 | $3,500 | $3,600 |
| Payroll Taxes | $21,789 | $24,580 | $24,791 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $637,189 | $690,480 | $745,011 |
| Profit Before Interest and Taxes | ($457,499) | $379,047 | $2,384,062 |
| EBITDA | ($457,499) | $379,047 | $2,384,062 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | ($91,500) | $75,809 | $476,812 |
| Net Profit | ($365,999) | $303,238 | $1,907,250 |
| Net Profit/Sales | -2.71% | 1.82% | 9.33% |
Profit Monthly
The profit for each month can be calculated by subtracting the total expenses from the total income for that month. This calculation estimates the net profit for each month of the year in a one-page business plan with financial projections.
Profit Yearly
The profit for the year can be calculated by adding up the total net profits for each month of the year. The calculation provides an estimate of the net profit for the entire year.
Gross Margin Monthly
The gross margin for each month can be calculated by subtracting the total expenses from the total income for that month. This calculation provides an estimate of the gross margin for each month of the year.
Gross Margin Yearly
The gross margin for the year can be calculated by adding up the total gross margins for each month of the year. This calculation provides an estimate of the gross margin for the entire year.
Projected Cash Flow
The projected cash flow statement calculates the expected cash inflows and outflows of the business. This statement should include all of the expected revenue, expenses, and investments. The cash flow statement will provide an estimate of the net cash flow for each month.
The chart below shows a trucking company’s cash flow projections.
An example of a trucking business company’s pro forma cash flow can be found in the following table. The cash flow statement includes general assumptions.
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $50,600 | $54,648 | $59,020 |
| Cash from Receivables | $258,000 | $278,640 | $300,931 |
| SUBTOTAL CASH FROM OPERATIONS | $308,600 | $336,374 | $363,284 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $80,500 | $87,500 | $93,500 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $38,000 | $39,000 | $41,000 |
| Bill Payments | $23,000 | $27,000 | $29,000 |
| SUBTOTAL SPENT ON OPERATIONS | $61,000 | $66,000 | $70,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $62,000 | $66,960 | $72,317 |
| Net Cash Flow | $21,000 | $24,000 | $25,000 |
| Cash Balance | $28,000 | $31,000 | $33,000 |
Projected Balance Sheet
The projected balance sheet is used to calculate the expected assets, liabilities, and equity of the business. This statement should include all of the expected assets, liabilities, and equity at the end of the year. The balance sheet will provide an estimate of the net worth of the business at the end of the year.
A trucking business company’s pro forma balance sheet shows its total assets, total liabilities, current subtotal liabilities, total capital, and total liabilities.
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $281,142 | $314,879 | $346,367 |
| Accounts Receivable | $25,887 | $28,993 | $32,589 |
| Inventory | $6,517 | $7,299 | $4,900 |
| Other Current Assets | $2,917 | $2,506 | $2,506 |
| TOTAL CURRENT ASSETS | $316,463 | $353,678 | $386,362 |
| Long-term Assets | |||
| Long-term Assets | $9,755 | $9,755 | $9,755 |
| Accumulated Depreciation | $18,222 | $20,409 | $22,960 |
| TOTAL LONG-TERM ASSETS | $28,300 | $31,696 | $35,658 |
| TOTAL ASSETS | $344,763 | $385,374 | $422,020 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $19,800 | $22,176 | $24,926 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $19,800 | $22,176 | $24,926 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $16,713 | $18,719 | $21,040 |
| Paid-in Capital | $39,237 | $50,160 | $51,322 |
| Retained Earnings | $58,500 | $63,765 | $70,142 |
| Earnings | $174,000 | $189,660 | $208,626 |
| TOTAL CAPITAL | $328,050 | $366,656 | $400,981 |
| TOTAL LIABILITIES AND CAPITAL | $344,763 | $385,374 | $422,020 |
| Net Worth | $298,860 | $325,757 | $358,333 |
Business Ratios
The business ratios are used to assess the performance of the business. This includes the return on investment, the profit margin, and the debt-to-equity ratio. These ratios indicate how well the business is performing and can be used to compare the performance of the business to other businesses in the same industry.
A trucking business company’s business ratios, ratio analysis, and total assets are shown in the following table.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 6.25% | 6.93% | 7.67% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 8.15% | 9.03% | 10.01% | 9.80% |
| Inventory | 5.00% | 5.54% | 6.14% | 9.90% |
| Other Current Assets | 2.25% | 2.49% | 2.76% | 2.40% |
| Total Current Assets | 130.30% | 151.00% | 152.00% | 158.00% |
| Long-term Assets | 12.58% | 11.60% | 11.64% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.58% | 4.62% | 4.66% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.51% | 7.57% | 7.64% | 7.38% |
| NET WORTH | 100.03% | 100.83% | 101.76% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 91.65% | 94.12% | 96.76% | 99.00% |
| Selling, General & Administrative Expenses | 93.80% | 96.33% | 99.03% | 97.80% |
| Advertising Expenses | 1.44% | 1.48% | 1.52% | 1.40% |
| Profit Before Interest and Taxes | 35.90% | 36.87% | 37.90% | 33.90% |
| Main Ratios | ||||
| Current | 33 | 34 | 35 | 33 |
| Quick | 32 | 33.2 | 34.03 | 33 |
| Total Debt to Total Assets | 0.18% | 0.18% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 71.68% | 74.24% | 75.00% | 75.00% |
| Pre-tax Return on Assets | 96.88% | 101.72% | 106.81% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 35.51% | 36.61% | 37.75% | N.A. |
| Return on Equity | 54.20% | 55.88% | 57.61% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.7 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 28.3 | 29.715 | 32 | N.A. |
| Accounts Payable Turnover | 14.9 | 16 | 16.3 | N.A. |
| Payment Days | 27 | 26 | 26 | N.A. |
| Total Asset Turnover | 2.6 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $238,900 | $252,278 | $266,406 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.85 | 0.87 | 0.89 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 25.06 | 25.13 | 25.77 | N.A. |
| Sales/Net Worth | 2.1 | 2.2 | 2.2 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
5. “Unlock Your Business’s Maximum Potential with Proven Financial Projections from OGS Capital”
Are you seeking to secure investor funding or expand your business?
A comprehensive business plan with financial projections is essential to achieving your goals. OGS Capital is an experienced consulting firm that can help you strategize and craft a business plan that will give you the vision and guidance needed to succeed.
Our experienced business consultants have years of experience working with small and large companies in the corporate world. Our team of professionals can help you define and prioritize your objectives, identify target markets and develop a comprehensive strategy for success. With our help, you can create the perfect plan to get the funding you need and the growth you desire.
We have the resources and expertise to provide a comprehensive business plan with financial projections. Our consultants use their knowledge of the marketplace and our analysis of financial data to develop models of potential sales and revenue streams. We provide a business plan with revenue projections which includes detailed cost and expense projections, allowing you to understand the financial implications of different strategies.
At OGS Capital, we understand the importance of creating a plan that accurately reflects your company’s goals and objectives. We offer various services to ensure your plan is tailored to your specific needs. We provide a comprehensive approach to financial analysis and modeling and can help you develop the right strategy for your business.
We are committed to providing the highest quality of service, and our consultants are dedicated to helping you succeed. With our help, you can create a comprehensive business plan with financial projections that will give you the vision and guidance needed to achieve your goals.
6. FAQ
How do you make financial projections in Excel?
At OGS Capital, we do financial projections in Excel using a combination of financial models and assumptions. Our financial models are based on industry best practices and are tailored to the specific needs of the client. We also use a combination of historical data and industry forecasts to develop realistic financial projections. Our financial projections are also supplemented with sensitivity analysis and scenario analysis to give our clients a better understanding of the risks and opportunities associated with the business. The financial projections also include a detailed balance sheet, income statement, cash flow statement, and other financial metrics.
What is a financial plan for a small business?
A financial plan for a small business is a detailed document that outlines the business’s financial goals and objectives and how it will achieve them. The plan typically includes a budget, cash flow forecast, income statement, balance sheet, and other financial statements. Additionally, a financial plan should include a strategy for managing risk and leveraging opportunities, such as an investment strategy. Finally, it should include a plan for monitoring and evaluating the progress of the business toward its goals.
OGSCapital’s team has assisted thousands of entrepreneurs with top-rated document, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.
