How to make financial forecasts for a Business plan using template in Excel

Business plan financial templates includes the forecast of financial results and cash flow for 5 years and contains the main key performance indicators for creditor. The template is provided in Excel format, with no passwords and locked cells in the document. Enjoy the use!

Business plan financial template. What is it?

Let’s consider in which way a Business plan financial template differs from the usual plane. Business plan is a document that reflects not only the financial side of the business, but also the technical, organizational and descriptive one. The financial template allows prepare a description of the business plan’s financial part. This part of the business plan is the most important for any investor or creditors. Frequently, investors or crediors do not understand the peculiarities of technologies at all, but they know very well how to count money, so the main purpose of drawing up a financial template is to show the profits for both an investor and a company that is going to cooperate with it.

When it comes to a business plan, Excel financial template is a template for calculations with a sequence of typical steps that do not depend on the type of the enterprise’s activity. Financial forecasts include the planned performance indicators of the enterprise. Commonly, a detailed plan for the coming year is prepared by months, while the remaining years are forecasted without a breakdown by months. In addition to income and expenditure, the main indicators of business performance, the financial template shows the calculation of cash flows. Forecasting of cash flows is the most valuable thing for creditor, since this is the basic information used to calculate the coefficients to assess the effectiveness of the investment project.

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What does a financial template for a business plan contain?

 The size of capital investments

Capital investments are the investments into the enterprise’s assets with the period of use of more than one year. These assets are formed by fixed assets, intangible assets and capital investments. It should be noted that capital investments are a temporary investment in the improvement of fixed assets that are reflected on a separate account in order to incorporate the whole amount to the fixed capital after all the necessary works are done. Also, the capital investments include goodwill. Goodwill is the value of the enterprise’s business reputation. In fact, it is a material evaluation of an intangible asset that allows an enterprise to be assessed at a higher value than that in its balance sheet.

The amount of money needed to start the project

Quite often, it is not enough to have fixed assets or production equipment to start business. Apart from this, one needs to have funds to support current production costs over a certain period of time. After some time, these funds will be generated from sales revenue. However, to produce the first batch of goods, it is necessary to calculate the amount of current expenses and predict how much time it takes to support production with the own funds.

Break-even point of the enterprise

The break-even point is a moment when the company does not receive any loss or profit. It’s a point where costs are equal to incomes. In fact, in order to determine the break-even point, it is necessary to calculate the amount of all current expenses of the enterprise.

Plan of incomes, expenses and profits

These are planned indicators of revenue from sales, enterprise’s costs and profits for 1-5 years, depending on the template. As a rule, the business plan includes the forecast for 5 years. At the same time, a detailed plan is prepared for the first year, while the following years may be characterized by general figures.

Plan of cash flows

Planned cash flow indicators for the next 5 years are formed here. The main objective is to determine the net cash flow and to discount it in time taking the discount rate into account.

Effectiveness indicators of the investment project

Such metrics as payback period, profitability index, net present value and the internal rate of return are determined.

How to use the business plan’s financial forecast template?

The financial template of business plan in Excel is a convenient tool that is available to any user. Its main advantage is that performance indicators are calculated automatically when the user adjusts the contents of the Excel cells. Filling in its own input data for calculations, the user receives a complete financial forecast for a business plan that is ready for use. The important thing to do is to lay out all the calculations so that the investor understands the rationale behind your numbers.

To launch a template, it’s necessary to download a document from the website and save it on your own computer. Excel calculations are not made from mobile devices. Downloading Excel financial projections’ template for business plan in .xlsx format, remember it may not be open to all users. You need to upgrade the Microsoft Office package to newer versions in order to open the document. Once a document has launched, it can be edited without any restrictions, but don’t forget to save the calculations.

How to download Excel financial template of business plan?

All users of the website can make use of the financial template of business plan in Excel. The file provides you with all calculations necessary for the complete version of the business plan. You can also download business plan’s Excel financial template in XLS format. The website also offers several options of financial plan templates, which are also free of charge for the website users.

How to describe Excel spreadsheets for a business plan?

Business plan cannot consist of the financial plan only. Although the investor is provided with the financial calculations, it’s necessary to describe each section of the business plan. A typical business plan structure can be found here.

When it comes to the description of the financial part of the business plan, the only tables are not enough. It is necessary to draw appropriate conclusions and emphasize the main thoughts. It is very important to accompany the table with the most important indicators to pay attention to.

Describing the value of capital investments, a special attention should be paid to where the equipment or facilities are purchased and to justify the purchase price. It is even more difficult to justify the value of intangible assets, since they must contain a documentary confirmation of the works, which cost is credited to the asset’s value.

Describing the financial part, it is necessary to pay attention to such key indicators as net cash flow, profit and sales revenue. Investors are particularly skeptical about planned sales figures that are not well-grounded. Clear and understandable methods of customer attraction are required.

It is equally important to justify the pricing policy of an enterprise. It should be noted why this price is chosen and not the other. It is also necessary to understand that an investment plan with a low price as a main strength is not likely to be financed, since price reduction is a too easy thing for everyone to do, let alone the competitors who should defend their place on the market.

How to draw up a business plan according to Excel calculations?

 The main financial issues that are reflected in the business plan include:

  1. the production plan of the enterprise;
  2. the organizational structure of the enterprise;
  3. capital financing;
  4. cash flows;
  5. financial results;
  6. indicators of the investment project’s effectiveness.

The production plan of a business plan describes in more detail the structure of expenses of the enterprise, considering the planned production volume. How to prepare a forecast about the production volume – read here. The final step is the calculation of a break-even point, which can be reflected indicating the amount of the enterprise’s total costs during 1-5 years.

Considering the organizational structure, it is necessary to pay attention to the formation of the staff and its wages. It is also necessary to calculate the amount of social insurance costs and include these costs into the wages bill.

Capital financing is described using the table titled “Structure of Sources for Generating Capital” which specifies the amounts of the own and attracted funds, as well as their percentage to total assets. It is necessary to indicate at what expense the funds are attracted. If this is a loan, then it is necessary to point out a bank where the loan is taken, a percentage rate applied to the loan and a period for which the loan is provided by the bank. If this is an offer to an investor to finance the required amount and become a member in the property structure, then the section should specify the percentage of dividends from profit (or a percentage of the enterprise’s assets) and contain a description of the dividend policy. The dividend policy identifies priority areas that the earned funds will be spent on: consumption or re-investment.

The cash flow plan is prepared for 5 years. Based on the cash flow data, it is possible to compile any statements of the enterprise and planned indicators of financial results respectively.

You can also get templates:

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