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How to Prepare a Financial Plan for Startup Business (w/ example)

Financial Statements Template

Free Financial Statements Template

Ajay Jagtap

  • December 7, 2023

13 Min Read

financial plan for startup business

If someone were to ask you about your business financials, could you give them a detailed answer?

Let’s say they ask—how do you allocate your operating expenses? What is your cash flow situation like? What is your exit strategy? And a series of similar other questions.

Instead of mumbling what to answer or shooting in the dark, as a founder, you must prepare yourself to answer this line of questioning—and creating a financial plan for your startup is the best way to do it.

A business plan’s financial plan section is no easy task—we get that.

But, you know what—this in-depth guide and financial plan example can make forecasting as simple as counting on your fingertips.

Ready to get started? Let’s begin by discussing startup financial planning.

What is Startup Financial Planning?

Startup financial planning, in simple terms, is a process of planning the financial aspects of a new business. It’s an integral part of a business plan and comprises its three major components: balance sheet, income statement, and cash-flow statement.

Apart from these statements, your financial section may also include revenue and sales forecasts, assets & liabilities, break-even analysis, and more. Your first financial plan may not be very detailed, but you can tweak and update it as your company grows.

Key Takeaways

  • Realistic assumptions, thorough research, and a clear understanding of the market are the key to reliable financial projections.
  • Cash flow projection, balance sheet, and income statement are three major components of a financial plan.
  • Preparing a financial plan is easier and faster when you use a financial planning tool.
  • Exploring “what-if” scenarios is an ideal method to understand the potential risks and opportunities involved in the business operations.

Why is Financial Planning Important to Your Startup?

Poor financial planning is one of the biggest reasons why most startups fail. In fact, a recent CNBC study reported that running out of cash was the reason behind 44% of startup failures in 2022.

A well-prepared financial plan provides a clear financial direction for your business, helps you set realistic financial objectives, create accurate forecasts, and shows your business is committed to its financial objectives.

It’s a key element of your business plan for winning potential investors. In fact, YC considered recent financial statements and projections to be critical elements of their Series A due diligence checklist .

Your financial plan demonstrates how your business manages expenses and generates revenue and helps them understand where your business stands today and in 5 years.

Makes sense why financial planning is important to your startup, doesn’t it? Let’s cut to the chase and discuss the key components of a startup’s financial plan.

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Key Components of a Startup Financial Plan

Whether creating a financial plan from scratch for a business venture or just modifying it for an existing one, here are the key components to consider including in your startup’s financial planning process.

Income Statement

An Income statement , also known as a profit-and-loss statement(P&L), shows your company’s income and expenditures. It also demonstrates how your business experienced any profit or loss over a given time.

Consider it as a snapshot of your business that shows the feasibility of your business idea. An income statement can be generated considering three scenarios: worst, expected, and best.

Your income or P&L statement must list the following:

  • Cost of goods or cost of sale
  • Gross margin
  • Operating expenses
  • Revenue streams
  • EBITDA (Earnings before interest, tax, depreciation , & amortization )

Established businesses can prepare annual income statements, whereas new businesses and startups should consider preparing monthly statements.

Cash flow Statement

A cash flow statement is one of the most critical financial statements for startups that summarize your business’s cash in-and-out flows over a given time.

This section provides details on the cash position of your business and its ability to meet monetary commitments on a timely basis.

Your cash flow projection consists of the following three components:

✅ Cash revenue projection: Here, you must enter each month’s estimated or expected sales figures.

✅ Cash disbursements: List expenditures that you expect to pay in cash for each month over one year.

✅ Cash flow reconciliation: Cash flow reconciliation is a process used to ensure the accuracy of cash flow projections. The adjusted amount is the cash flow balance carried over to the next month.

Furthermore, a company’s cash flow projections can be crucial while assessing liquidity, its ability to generate positive cash flows and pay off debts, and invest in growth initiatives.

Balance Sheet

Your balance sheet is a financial statement that reports your company’s assets, liabilities, and shareholder equity at a given time.

Consider it as a snapshot of what your business owns and owes, as well as the amount invested by the shareholders.

This statement consists of three parts: assets , liabilities, and the balance calculated by the difference between the first two. The final numbers on this sheet reflect the business owner’s equity or value.

Balance sheets follow the following accounting equation with assets on one side and liabilities plus Owner’s equity on the other:

Here is what’s the core purpose of having a balance-sheet:

  • Indicates the capital need of the business
  • It helps to identify the allocation of resources
  • It calculates the requirement of seed money you put up, and
  • How much finance is required?

Since it helps investors understand the condition of your business on a given date, it’s a financial statement you can’t miss out on.

Break-even Analysis

Break-even analysis is a startup or small business accounting practice used to determine when a company, product, or service will become profitable.

For instance, a break-even analysis could help you understand how many candles you need to sell to cover your warehousing and manufacturing costs and start making profits.

Remember, anything you sell beyond the break-even point will result in profit.

You must be aware of your fixed and variable costs to accurately determine your startup’s break-even point.

  • Fixed costs: fixed expenses that stay the same no matter what.
  • Variable costs: expenses that fluctuate over time depending on production or sales.

A break-even point helps you smartly price your goods or services, cover fixed costs, catch missing expenses, and set sales targets while helping investors gain confidence in your business. No brainer—why it’s a key component of your startup’s financial plan.

Having covered all the key elements of a financial plan, let’s discuss how you can create a financial plan for your startup.

How to Create a Financial Section of a Startup Business Plan?

1. determine your financial needs.

You can’t start financial planning without understanding your financial requirements, can you? Get your notepad or simply open a notion doc; it’s time for some critical thinking.

Start by assessing your current situation by—calculating your income, expenses , assets, and liabilities, what the startup costs are, how much you have against them, and how much financing you need.

Assessing your current financial situation and health will help determine how much capital you need for your startup and help plan fundraising activities and outreach.

Furthermore, determining financial needs helps prioritize operational activities and expenses, effectively allocate resources, and increase the viability and sustainability of a business in the long run.

Having learned to determine financial needs, let’s head straight to setting financial goals.

2. Define Your Financial Goals

Setting realistic financial goals is fundamental in preparing an effective financial plan. So, it would help to outline your long-term strategies and goals at the beginning of your financial planning process.

Let’s understand it this way—if you are a SaaS startup pursuing VC financing rounds, you may ask investors about what matters to them the most and prepare your financial plan accordingly.

However, a coffee shop owner seeking a business loan may need to create a plan that appeals to banks, not investors. At the same time, an internal financial plan designed to offer financial direction and resource allocation may not be the same as previous examples, seeing its different use case.

Feeling overwhelmed? Just define your financial goals—you’ll be fine.

You can start by identifying your business KPIs (key performance indicators); it would be an ideal starting point.

3. Choose the Right Financial Planning Tool

Let’s face it—preparing a financial plan using Excel is no joke. One would only use this method if they had all the time in the world.

Having the right financial planning software will simplify and speed up the process and guide you through creating accurate financial forecasts.

Many financial planning software and tools claim to be the ideal solution, but it’s you who will identify and choose a tool that is best for your financial planning needs.

financial business plan for startup

Create a Financial Plan with Upmetrics in no time

Enter your Financial Assumptions, and we’ll calculate your monthly/quarterly and yearly financial projections.

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4. Make Assumptions Before Projecting Financials

Once you have a financial planning tool, you can move forward to the next step— making financial assumptions for your plan based on your company’s current performance and past financial records.

You’re just making predictions about your company’s financial future, so there’s no need to overthink or complicate the process.

You can gather your business’ historical financial data, market trends, and other relevant documents to help create a base for accurate financial projections.

After you have developed rough assumptions and a good understanding of your business finances, you can move forward to the next step—projecting financials.

5. Prepare Realistic Financial Projections

It’s a no-brainer—financial forecasting is the most critical yet challenging aspect of financial planning. However, it’s effortless if you’re using a financial planning software.

Upmetrics’ forecasting feature can help you project financials for up to 7 years. However, new startups usually consider planning for the next five years. Although it can be contradictory considering your financial goals and investor specifications.

Following are the two key aspects of your financial projections:

Revenue Projections

In simple terms, revenue projections help investors determine how much revenue your business plans to generate in years to come.

It generally involves conducting market research, determining pricing strategy , and cash flow analysis—which we’ve already discussed in the previous steps.

The following are the key components of an accurate revenue projection report:

  • Market analysis
  • Sales forecast
  • Pricing strategy
  • Growth assumptions
  • Seasonal variations

This is a critical section for pre-revenue startups, so ensure your projections accurately align with your startup’s financial model and revenue goals.

Expense Projections

Both revenue and expense projections are correlated to each other. As revenue forecasts projected revenue assumptions, expense projections will estimate expenses associated with operating your business.

Accurately estimating your expenses will help in effective cash flow analysis and proper resource allocation.

These are the most common costs to consider while projecting expenses:

  • Fixed costs
  • Variable costs
  • Employee costs or payroll expenses
  • Operational expenses
  • Marketing and advertising expenses
  • Emergency fund

Remember, realistic assumptions, thorough research, and a clear understanding of your market are the key to reliable financial projections.

6. Consider “What if” Scenarios

After you project your financials, it’s time to test your assumptions with what-if analysis, also known as sensitivity analysis.

Using what-if analysis with different scenarios while projecting your financials will increase transparency and help investors better understand your startup’s future with its best, expected, and worst-case scenarios.

Exploring “what-if” scenarios is the best way to better understand the potential risks and opportunities involved in business operations. This proactive exercise will help you make strategic decisions and necessary adjustments to your financial plan.

7. Build a Visual Report

If you’ve closely followed the steps leading to this, you know how to research for financial projections, create a financial plan, and test assumptions using “what-if” scenarios.

Now, we’ll prepare visual reports to present your numbers in a visually appealing and easily digestible format.

Don’t worry—it’s no extra effort. You’ve already made a visual report while creating your financial plan and forecasting financials.

Check the dashboard to see the visual presentation of your projections and reports, and use the necessary financial data, diagrams, and graphs in the final draft of your financial plan.

Here’s what Upmetrics’ dashboard looks like:

Upmetrics financial projections visual report

8. Monitor and Adjust Your Financial Plan

Even though it’s not a primary step in creating a good financial plan, it’s quite essential to regularly monitor and adjust your financial plan to ensure the assumptions you made are still relevant, and you are heading in the right direction.

There are multiple ways to monitor your financial plan.

For instance, you can compare your assumptions with actual results to ensure accurate projections based on metrics like new customers acquired and acquisition costs, net profit, and gross margin.

Consider making necessary adjustments if your assumptions are not resonating with actual numbers.

Also, keep an eye on whether the changes you’ve identified are having the desired effect by monitoring their implementation.

And that was the last step in our financial planning guide. However, it’s not the end. Have a look at this financial plan example.

Startup Financial Plan Example

Having learned about financial planning, let’s quickly discuss a coffee shop startup financial plan example prepared using Upmetrics.

Important Assumptions

  • The sales forecast is conservative and assumes a 5% increase in Year 2 and a 10% in Year 3.
  • The analysis accounts for economic seasonality – wherein some months revenues peak (such as holidays ) and wanes in slower months.
  • The analysis assumes the owner will not withdraw any salary till the 3rd year; at any time it is assumed that the owner’s withdrawal is available at his discretion.
  • Sales are cash basis – nonaccrual accounting
  • Moderate ramp- up in staff over the 5 years forecast
  • Barista salary in the forecast is $36,000 in 2023.
  • In general, most cafes have an 85% gross profit margin
  • In general, most cafes have a 3% net profit margin

Projected Balance Sheet

Projected Balance Sheet

Projected Cash-Flow Statement

Cash-Flow Statement

Projected Profit & Loss Statement

Profit & Loss Statement

Break Even Analysis

Break Even Analysis

Start Preparing Your Financial Plan

We covered everything about financial planning in this guide, didn’t we? Although it doesn’t fulfill our objective to the fullest—we want you to finish your financial plan.

Sounds like a tough job? We have an easy way out for you—Upmetrics’ financial forecasting feature. Simply enter your financial assumptions, and let it do the rest.

So what are you waiting for? Try Upmetrics and create your financial plan in a snap.

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Frequently Asked Questions

How often should i update my financial projections.

Well, there is no particular rule about it. However, reviewing and updating your financial plan once a year is considered an ideal practice as it ensures that the financial aspirations you started and the projections you made are still relevant.

How do I estimate startup costs accurately?

You can estimate your startup costs by identifying and factoring various one-time, recurring, and hidden expenses. However, using a financial forecasting tool like Upmetrics will ensure accurate costs while speeding up the process.

What financial ratios should startups pay attention to?

Here’s a list of financial ratios every startup owner should keep an eye on:

  • Net profit margin
  • Current ratio
  • Quick ratio
  • Working capital
  • Return on equity
  • Debt-to-equity ratio
  • Return on assets
  • Debt-to-asset ratio

What are the 3 different scenarios in scenario analysis?

As discussed earlier, Scenario analysis is the process of ascertaining and analyzing possible events that can occur in the future. Startups or businesses often consider analyzing these three scenarios:

  • base-case (expected) scenario
  • Worst-case scenario
  • best case scenario.

About the Author

financial business plan for startup

Ajay is a SaaS writer and personal finance blogger who has been active in the space for over three years, writing about startups, business planning, budgeting, credit cards, and other topics related to personal finance. If not writing, he’s probably having a power nap. Read more

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How to Write a Small Business Financial Plan

Stairs leading up to a dollar sign. Represents creating a financial plan to achieve profitability.

Noah Parsons

3 min. read

Updated January 3, 2024

Creating a financial plan is often the most intimidating part of writing a business plan. It’s also one of the most vital. Businesses with well-structured and accurate financial statements in place are more prepared to pitch to investors, receive funding, and achieve long-term success.

Thankfully, you don’t need an accounting degree to successfully put your budget and forecasts together. Here is everything you need to include in your financial plan along with optional performance metrics, specifics for funding, and free templates.

  • Key components of a financial plan

A sound financial plan is made up of six key components that help you easily track and forecast your business financials. They include your:

Sales forecast

What do you expect to sell in a given period? Segment and organize your sales projections with a personalized sales forecast based on your business type.

Subscription sales forecast

While not too different from traditional sales forecasts—there are a few specific terms and calculations you’ll need to know when forecasting sales for a subscription-based business.

Expense budget

Create, review, and revise your expense budget to keep your business on track and more easily predict future expenses.

How to forecast personnel costs

How much do your current, and future, employees’ pay, taxes, and benefits cost your business? Find out by forecasting your personnel costs.

Profit and loss forecast

Track how you make money and how much you spend by listing all of your revenue streams and expenses in your profit and loss statement.

Cash flow forecast

Manage and create projections for the inflow and outflow of cash by building a cash flow statement and forecast.

Balance sheet

Need a snapshot of your business’s financial position? Keep an eye on your assets, liabilities, and equity within the balance sheet.

What to include if you plan to pursue funding

Do you plan to pursue any form of funding or financing? If the answer is yes, then there are a few additional pieces of information that you’ll need to include as part of your financial plan.

Highlight any risks and assumptions

Every entrepreneur takes risks with the biggest being assumptions and guesses about the future. Just be sure to track and address these unknowns in your plan early on.

Plan your exit strategy

Investors will want to know your long-term plans as a business owner. While you don’t need to have all the details, it’s worth taking the time to think through how you eventually plan to leave your business.

  • Financial ratios and metrics

With all of your financial statements and forecasts in place, you have all the numbers needed to calculate insightful financial ratios. While these metrics are entirely optional to include in your plan, having them easily accessible can be valuable for tracking your performance and overall financial situation.

Common business ratios

Unsure of which business ratios you should be using? Check out this list of key financial ratios that bankers, financial analysts, and investors will want to see.

Break-even analysis

Do you want to know when you’ll become profitable? Find out how much you need to sell to offset your production costs by conducting a break-even analysis.

How to calculate ROI

How much could a business decision be worth? Evaluate the efficiency or profitability by calculating the potential return on investment (ROI).

  • Financial plan templates and tools

Download and use these free financial templates and calculators to easily create your own financial plan.

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Sales forecast template

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Content Author: Noah Parsons

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

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Creating a Financial Plan for Startups: The Ultimate Guide

Brittany Wren

The top reason startups fail is because they run out of money, according to a 2020 survey by Wilbur Labs . And one of the main reasons they run out of money is because their financial planning consists of rosy projections of the best-case scenario, based on bad data — or no financial planning at all.

Creating a financial plan is essential to a startup’s success. For one thing, most investors need to see a startup’s financial plan before they even consider funding it. More importantly, a financial plan allows you to quantify your business assumptions, define specific benchmarks, plan for worst- and best-case scenarios, and measure your company’s success (even before you start making a profit).

The bottom line is: if you have expenses, you should have a financial plan. But you don’t need an accounting degree (or even an accountant) to get started.

What is startup financial planning?

Your startup’s financial plan is the roadmap that lays out the path for your company’s future financial success. In it, you make predictions and plans based on historical performance and industry research. Start with your company’s current financial situation, add in future goals and predictions, and strategize how to get there. Financial plans include details about:

  • Fixed/variable expenses
  • Gross/operating margins
  • Profit potential and durability
  • Break-even point
  • Cash balance
  • Cash flow changes

Don’t have all that information close at hand? That’s okay. The first financial plan you create may not be very detailed. You’ll keep building and tweaking it as your company iterates.

A financial plan is NOT the same as a business plan

A business plan is written in paragraphs. A financial plan is (traditionally) a giant Excel spreadsheet. It’s synonymous with Pro Forma financial, which is the finance industry term for three detailed reports: cash flow statement, profit and loss (P&L) , and balance sheet . Financial planning is part of the due diligence process , which you’ll need to provide to investors prior to signing a Series A term sheet.

Financial planning is made up of several smaller activities:

These activities include:

  • Creating a hiring plan
  • Making projections about sales, expenses, cash flow, income statement, and balance sheet
  • Analyzing projections
  • Producing profit and loss statements
  • Financial projections and modeling
  • Analyzing internal controls
  • Creating annual growth strategies

Before you start: collect data and tools

You can’t create a financial plan in a vacuum. First, you’ll need to assemble some critical things:

financial business plan for startup

Before you can accurately create a financial plan, identify and assemble all your existing financial data. What financial accounts (bank accounts, credit cards) are you using for your business income and expenses? Where/how are you doing your bookkeeping (e.g., QuickBooks, Xero, NetSuite), and is that information up to date?

You’ll need to import the above information into your financial plan. Updates can be done manually with a spreadsheet or automatically using software (more on that below). Generally, it’s better if updates can be automated so you know you’re looking at the latest data and can be more nimble with decision-making.

Now you need to decide what tools you’ll use to create a financial plan. Options include a spreadsheet, dedicated software, or outsourcing to a CPA.

If you opt for a spreadsheet, you can download an Excel or Google Sheet template from an online resource, or you can create it yourself. If you create it yourself, a finance analyst, HR manager, or office manager can maintain it, and then later, a CFO can run point on the whole process.

The problem with a spreadsheet is that it’s often too fragile for everyone to use collaboratively — it’s not automatically version controlled, and it’s too manual. That’s why you might choose software like Pry, Finmark, Brixx, or Causal. Obviously, we think Pry is the best choice for financial planning. But whatever you choose, the main reason to use software is it will scale as you grow.

Finally, you can hire a CPA to build a financial plan for you. This option can afford you some peace of mind. However, it costs a lot more than a DIY spreadsheet or software approach. Additionally, you’ll understand your business better if you create your financial plan internally.

Steps to create a financial plan

Startup financial planning can seem daunting at first, especially if you’re an early-stage founder and this is your first time. We’ll break it down below.

1. Visualize the end result

At the beginning of the financial planning process, you should sketch out long-term strategies and goals. If you’re pursuing a financing round, ask your investors about what metrics matter the most to them. That way you can bring those details to the forefront instead of burying them in a series of complex tabs.

A good starting point is to determine your company’s KPIs. What are the things you want to track and forecast? Remember that different metrics are important to different business models . For example, SaaS companies should include metrics like MRR (monthly recurring revenue) , as well as bank balance and budget vs. actuals.

Thinking back to your best lever of growth, what will be your key milestones? This could include acquiring a certain number of customers, raising a round of fundraising, or making an acquisition.

This sounds like, “To reach X, we need to hit A, B, C, and D milestones. Here’s how we think we’ll get from A to B, then B to C, then C to D.” – Underscore VC

financial business plan for startup

2. Pick the right template or software

It’s hard to create a generic template for all sorts of businesses, so find a template that matches your business model. Sometimes you can access these templates for free, like the one in this LinkedIn thread . Or you can download a template in exchange for your contact info, like this one for SaaS startups.

Of course, you can also choose software that creates this template for you instead of trying to retrofit some random online spreadsheet template. At Pry, we can customize reports and dashboards to your specific business model for $500 with our custom onboarding.

financial business plan for startup

3. Import existing data

Now you’ll need to import your existing information from different financial accounts like QuickBooks or Xero (depending on which you use), bank account(s), and/or credit card(s). This is sometimes referred to as the “ Chart of Accounts .” Your bank data could be a statement, or it could just be today’s balance. Ideally, you should pull as much as possible, so you have the clearest, most detailed picture.

The information you should import can be broken down as follows:

  • Assets (e.g., checking, savings, amounts owed to the company from customers, inventory, prepaid expenses)
  • Liabilities (e.g., line of credit, credit card payable, the amount owed to vendors, payroll taxes payable)
  • Equity (assets minus liabilities)
  • Income (e.g., product sales, interest)
  • Expenses (e.g., cost of goods sold, marketing, travel, rent, office supplies)

If your financial plan is a spreadsheet, you’ll need to manually export your existing data and then import it into your spreadsheet. This process looks slightly different for each different financial account. QuickBooks and Xero both outline how to do this on their websites.

If you’re using a financial planning tool like Pry, you can connect these accounts so they sync automatically via an API integration .

financial business plan for startup

4. Project expenses

Once you have an accurate picture of current accounts, you should start projecting future expenses. These can be broken into two broad categories: direct expenses (aka, costs of sales) and indirect expenses (aka, selling, general, and administrative expenses). Direct expenses include any raw materials, production equipment depreciation, hosting fees, etc. Everything else (other than product costs and capital purchases) is considered an indirect expense.

Salaries and benefits (an indirect expense) are usually the biggest expense at this point, so we recommend starting with this one. You should add existing employees and forecast future hires to predict the additional cost of roles and salaries over time. Be sure to include benefits and payroll taxes. Also, don’t project people out by dollars spent on them — do it by name/role/salary, then convert salary into a monthly cost. For example, 4 Software Engineers, $100k each, Start Dates: July 2021, September 2021, November 2021, January 2022 .

Build a headcount plan by role for the pro forma period by month. This approach creates a hiring plan based on revenue timing to properly support the business. It also allows for quick adjustments when modeling revenue changes. – Tiffany Hovland, CPA, Journal of Accountancy

  • Legal and professional services (e.g., the costs of incorporating a new business, like business license fees)
  • IT (e.g., data storage, software, data security)
  • Office rent
  • Office supplies

As you make projections about future expenses, remember to focus on high-level estimates based on industry standards, location, and company size.A lot of things can change, and you shouldn’t waste time perfecting predictions — they may not come true, anyway.

financial business plan for startup

5. Project revenue

Now you’ll describe how your company will produce income. If your company is pre-revenue, you can start with industry standards. Realistic revenue projections are important to investors, and they influence all other assumptions about profit and loss (P&L) . If revenue projections are drastically wrong, you may over- or understaff your company or make big purchases you can’t afford.

To make accurate projections, define the revenue levers, drivers, and assumptions. Revenue levers could be products and/or services, software maintenance agreements, or channel partner sales. You also need to identify which activities increase or decrease revenue, as well as pricing and activity assumptions.

One important revenue projection for SaaS businesses is MRR. Here’s an example of this type of revenue projection:

  • Revenue lever: monthly subscription revenue
  • Revenue driver: marketing spend and conversion rates
  • Revenue assumptions: $200 subscription price, 100 initial customers, 25 new signups per month, two churned customers per month

To project MRR using software like Pry, use this formula: MRR = total customers * average subscription price.

financial business plan for startup

6. Build a report

After you have collected all your current financial information and built out some projections, it’s time to present it in an easily digestible format to drive decision-making. A dashboard is a visual way to summarize and report on the data. It makes it easy for business owners, board members, and investors to look at and know the status of the company.

Now that the estimates are complete, it is time to transform the work into a collection of facts that potential investors and business owners can use to drive decisions. The initial information and discussions should focus on high-level assumptions and give confidence that the business can scale and grow as the example outlines. – Tiffany Hovland, CPA, Journal of Accountancy

If you’re using Excel for your financial plan, you can build these reports as pivot tables. Or, if you find pivot tables too cumbersome, you can create a dashboard easily using software. Here’s what Pry’s dashboard looks like:

financial business plan for startup

7. Test assumptions

The final step of financial planning is often called a what-if analysis or sensitivity analysis. Now that you’ve built some assumptions about the future, try playing with some different ones — some aggressive and some conservative. Change some inputs and review the reports in different scenarios. This will help you see how the assumptions relate and ensure that the end model makes sense.

Another way to test your assumptions is to compare your company’s metrics to those of other companies. Larger companies might check the SEC’s website for public competitors or companies in a similar space with similar net revenue. If you can’t find a good comparison, though, you can check with investors to see which assumptions you should tweak. Then revise accordingly.

We picked a list of IPO comparables—enterprise-class SaaS companies that had gone public. We look at up to three years of their financial data, and based on our growth rate, revenue, and expenses as a percentage of revenue, we compare ourselves against their metrics. These comparables are a way to validate our progress against our three-year plan. – Jason Purcell, CEO of Salsify

Now it’s your turn (we can help)

The bottom line is that if your startup has expenses, you should also have a financial plan. And now that you know how to create one, it’s time to get started.If the prospect of making pivot tables in Excel intimidates you, try creating a financial plan with an out-of-box tool like Pry. It does everything the expensive firms do but without the hefty price tag.

View Pry’s pricing ->

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Start » startup, business plan financials: 3 statements to include.

The finance section of your business plan is essential to securing investors and determining whether your idea is even viable. Here's what to include.

 Businessman reviews financial documents

If your business plan is the blueprint of how to run your company, the financials section is the key to making it happen. The finance section of your business plan is essential to determining whether your idea is even viable in the long term. It’s also necessary to convince investors of this viability and subsequently secure the type and amount of funding you need. Here’s what to include in your business plan financials.

[Read: How to Write a One-Page Business Plan ]

What are business plan financials?

Business plan financials is the section of your business plan that outlines your past, current and projected financial state. This section includes all the numbers and hard data you’ll need to plan for your business’s future, and to make your case to potential investors. You will need to include supporting financial documents and any funding requests in this part of your business plan.

Business plan financials are vital because they allow you to budget for existing or future expenses, as well as forecast your business’s future finances. A strongly written finance section also helps you obtain necessary funding from investors, allowing you to grow your business.

Sections to include in your business plan financials

Here are the three statements to include in the finance section of your business plan:

Profit and loss statement

A profit and loss statement , also known as an income statement, identifies your business’s revenue (profit) and expenses (loss). This document describes your company’s overall financial health in a given time period. While profit and loss statements are typically prepared quarterly, you will need to do so at least annually before filing your business tax return with the IRS.

Common items to include on a profit and loss statement :

  • Revenue: total sales and refunds, including any money gained from selling property or equipment.
  • Expenditures: total expenses.
  • Cost of goods sold (COGS): the cost of making products, including materials and time.
  • Gross margin: revenue minus COGS.
  • Operational expenditures (OPEX): the cost of running your business, including paying employees, rent, equipment and travel expenses.
  • Depreciation: any loss of value over time, such as with equipment.
  • Earnings before tax (EBT): revenue minus COGS, OPEX, interest, loan payments and depreciation.
  • Profit: revenue minus all of your expenses.

Businesses that have not yet started should provide projected income statements in their financials section. Currently operational businesses should include past and present income statements, in addition to any future projections.

[Read: Top Small Business Planning Strategies ]

A strongly written finance section also helps you obtain necessary funding from investors, allowing you to grow your business.

Balance sheet

A balance sheet provides a snapshot of your company’s finances, allowing you to keep track of earnings and expenses. It includes what your business owns (assets) versus what it owes (liabilities), as well as how much your business is currently worth (equity).

On the assets side of your balance sheet, you will have three subsections: current assets, fixed assets and other assets. Current assets include cash or its equivalent value, while fixed assets refer to long-term investments like equipment or buildings. Any assets that do not fall within these categories, such as patents and copyrights, can be classified as other assets.

On the liabilities side of your balance sheet, include a total of what your business owes. These can be broken down into two parts: current liabilities (amounts to be paid within a year) and long-term liabilities (amounts due for longer than a year, including mortgages and employee benefits).

Once you’ve calculated your assets and liabilities, you can determine your business’s net worth, also known as equity. This can be calculated by subtracting what you owe from what you own, or assets minus liabilities.

Cash flow statement

A cash flow statement shows the exact amount of money coming into your business (inflow) and going out of it (outflow). Each cost incurred or amount earned should be documented on its own line, and categorized into one of the following three categories: operating activities, investment activities and financing activities. These three categories can all have inflow and outflow activities.

Operating activities involve any ongoing expenses necessary for day-to-day operations; these are likely to make up the majority of your cash flow statement. Investment activities, on the other hand, cover any long-term payments that are needed to start and run your business. Finally, financing activities include the money you’ve used to fund your business venture, including transactions with creditors or funders.

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Blog Feature Updates

Startup Business Plans 101: Your Path to Success

By Jay Nair , Jul 24, 2023

financial business plan for startup

It’s time — you’ve got a promising idea and you’re now prepared to invest the necessary effort to turn it into reality. Startup business plans are vital hack tools that will guide you through your entrepreneurial journey and a business venture with clarity and purpose.

Though vital, business planning doesn’t have to be a chore. Business plans for lean startups and solopreneurs can simply outline the business concept, sales proposition, target customers and sketch out a plan of action to bring the product or service to market. These plans will serve as strategic documents outlining your company’s vision, mission statements, business objectives, target market, financial forecasts and growth strategies.

To simplify the creation of a robust business plan as an entrepreneur, you can harness the power of a business plan maker . This invaluable tool streamlines the process and ensures a polished and well-organized presentation.  Startup business plan templates provide pre-designed frameworks that can be customized to suit your specific industry needs, saving valuable time and effort while preserving the essential structure of a comprehensive business plan.

Ready to begin? Let’s go!

financial business plan for startup

Just so you know, some of our business plan templates are free to use and some require a small monthly fee. Sign-up is always free, as is access to Venngage’s online drag-and-drop editor.

Click to jump ahead:

  • Laying the foundation of your startup business plan
  • Business plan executive summary
  • Writing your business description
  • Marketing & sales strategies
  • Startup operational plans
  • Financial plans – forecasting and projections
  • Team and management
  • Appendix and supporting documents

FAQs on startup business plans

  • Use Venngage to create your startup business plan

Preparation and research: 6 steps to laying the foundation of your startup business plan

  • What problem does your product or service solve? 
  • Who are your target customers? 
  • What differentiates your offering from existing solutions in the market? 

This self-reflection will help you establish a clear direction for your startup.

  • Next, conduct market research to gather valuable insights about your target market , including demographics, preferences, and purchasing behavior . This data will enable you to tailor your product or service to meet the specific needs of your customers. Identify trends, industry growth projections, and any potential barriers or challenges you may encounter.
  • Competitive analysis is another critical aspect of preparation and research. Study your competitors to understand their strengths, weaknesses, and strategies. Analyze their pricing, marketing tactics, customer experience, and product/service features. This analysis will allow you to identify gaps in the market and position your startup to offer a unique value proposition .
  • Financial research is equally important during this phase. Calculate the costs associated with starting and operating your business , including overhead expenses, production costs, marketing expenses, and employee salaries. Assess potential revenue streams and estimate your expected sales. This financial analysis will help you determine the feasibility of your business idea and outline a realistic financial plan.
  • Additionally, gather information about legal and regulatory requirements that apply to your industry and location . Understand the necessary permits, licenses, and certifications you need to operate legally. Complying with these regulations from the outset will prevent potential setbacks or legal issues in the future.
  • Finally, organize your findings and insights into a coherent business plan. Create your business plan outline , list your business plan goals, strategies, target market, competitive analysis, marketing plan, financial projections and any other relevant information. This compilation will serve as a roadmap for your startup, guiding your decisions and actions moving forward.

You’ve just encountered a wealth of information and are well on your way to becoming a seasoned business owner! This can sometimes feel overwhelming. But don’t worry, take a moment to breathe deeply and remember how far you’ve come. You’ve got this!

To help you condense and organize your essential points, I have brilliant one-page samples of business plan layouts and templates that will capture everything in a concise format.

financial business plan for startup

Knowing when to use a one-page business plan versus a more comprehensive plan depends on various factors. A one-page business plan is ideal for providing a quick overview, saving time, and internal planning. However, it may not suffice for detailed information, complex business models, or meeting external stakeholders’ expectations.

Ultimately, consider the purpose, audience, and complexity of your business when deciding whether to utilize a one-page business plan or opt for a more detailed approach.

Executive Summary: Your Startup’s Elevator Pitch

First impressions are crucial, and a concise yet comprehensive executive summary is your chance to grab potential investors’ attention.

To create a compelling elevator pitch, consider the following key elements:

Problem Statement : Clearly articulate the problem or pain point that your startup addresses. Emphasize the significance of the problem and the potential market size

Solution : Concisely describe your innovative solution or product that solves the identified problem. Highlight its unique features or benefits that differentiate it from existing alternatives.

Target Market : Define your ideal customer segment and outline the market potential. Demonstrate a deep understanding of your target audience’s needs, preferences, and behavior.

Competitive Advantage : Showcase the competitive edge that sets your startup apart from competitors. This could include intellectual property, strategic partnerships, cost advantages, or disruptive technology.

Business Model : Briefly explain how your startup generates revenue and sustains profitability. Outline your monetization strategy, pricing model, and any recurring revenue streams .

Traction and Milestones : Highlight any significant achievements or milestones reached by your startup. This could include customer acquisitions, partnerships, product development progress, or market validation.

Team : Showcase the expertise and qualifications of your founding team or business partners. Highlight key members and their relevant experiences demonstrating their ability to execute the business plan.

I can sense your eagerness to dive right in! To expedite your progress, I’m excited to present you with a collection of meticulously crafted executive summary templates. These templates have been thoughtfully designed and structured by Venngage designers, ensuring seamless integration into your thorough business plan. All you need to do is infuse them with your brilliant startup ideas, and you’ll be well on your way to success!

financial business plan for startup

Now, remember that there’s still a ton of work to be done. Let’s take a moment to regroup and ensure we’re on the right track. Before diving into the process of writing your business plan , it’s imperative to gather a wealth of essential information. Conducting comprehensive research is key, and it should encompass the following aspects:

How to assess your target audience

To gain comprehensive insights into your potential user base, creating a user persona report is invaluable. This persona guide report will help you develop a detailed understanding of various user profiles, enabling you to tailor your products or services to meet their specific needs and preferences.

financial business plan for startup

Understanding Your Market and Competition

Analyze your market and any trends relevant to your startup. Research your competitors, their strengths and weaknesses, and identify what differentiates your offering from the competition.

financial business plan for startup

Developing a Unique Value Proposition

A business Unique Value Proposition (UVP) is a concise statement that communicates the unique advantage a product or service offers over competitors, addressing a specific problem or need. It highlights the distinctive value and benefits customers can expect, helping businesses attract and retain customers by differentiating themselves in the market.

Your unique value proposition (UVP) is the cornerstone of your startup, defining what sets you apart from your competitors. A strong UVP focuses on the specific benefits and solutions your startup offers to customers.

financial business plan for startup

Company Description: Painting the Picture

Your company description allows you to showcase your startup’s unique features and provide more in-depth details about your business. This section should include:

The Purpose of the Company Description

Clarify the purpose of your business, your goals and how your startup is uniquely positioned to achieve them.

Essential Information to Include

Include details such as your company’s legal structure, location and a brief history of any founders or key personnel.

Showcase Your Company’s Unique Features

Emphasize the unique aspects of your startup, explaining how these features translate into a competitive advantage.

Allow me to provide you with a dash of inspiration to ignite the momentum for your startup business plan:

financial business plan for startup

When it comes to showcasing your company’s unique features, keep in mind that it is essential to emphasize and highlight the distinctive aspects of your startup . Clearly articulate how these features set your company apart from competitors and translate into a tangible competitive advantage . 

Whether it’s through cutting-edge technology, innovative business models, exceptional customer service, or a combination of factors, conveying the value and impact of these unique features is crucial. By effectively communicating the benefits they bring to customers, investors, and partners, you can demonstrate the significance of your offerings and differentiate yourself in the market.

Product/Service Line: What You’re Bringing to the Table

This section highlights the finer details of your product or service offerings:

Detailing Your Product/Service Offerings

Provide a thorough description of your products/services, highlighting key features and their intended use.

financial business plan for startup

Highlighting Features, Benefits, and Solutions

Demonstrate how your startup’s offerings solve specific problems or address customer needs through an analysis of product features and associated benefits.

financial business plan for startup

Defining Your Pricing and Revenue Model

Outline your startup’s pricing strategy and how it aligns with the overall business model. Detail any plans for scaling or expanding your revenue sources in the future.

financial business plan for startup

Presenting Your Market Research Findings

Share insights from your market research, including target customer demographics, market size, and growth potential.

financial business plan for startup

Identifying Market Trends and Opportunities

Discuss current trends, emerging opportunities, and how your startup will capitalize on these developments.

financial business plan for startup

Marketing and Sales Strategies: Spreading the Word

Developing a robust marketing and sales strategy plan aligns with your overall business strategy and ensures steady growth. Marketing planning will be an essential part of your journey once you’ve got your business plan tight-knit! Also, creating a marketing strategy can be the most fun part of your business plan!

Developing a Comprehensive Marketing Strategy & Plan

  • Outline Specific Marketing Goals : Clearly define your marketing objectives, whether it’s increasing brand awareness, driving website traffic, generating leads, or boosting sales . Set measurable targets to track progress.
  • Identify Target Audience : Conduct thorough market research to identify your ideal customer profiles. Understand their demographics, behaviors, preferences, and pain points. Tailor your marketing messages to resonate with their needs.
  • Select Effective Marketing Channels : Consider both digital and traditional channels that align with your target audience and marketing goals. This may include online advertising, social media marketing, content marketing, search engine optimization (SEO), email campaigns, print media, events, or partnerships.
  • Craft Compelling Messages : Develop persuasive and consistent messaging that highlights the unique value proposition of your products or services. Clearly communicate how your offerings solve customer problems or improve their lives.

financial business plan for startup

5 Tips for Effective Sales Techniques and Growth Strategies + free templates

  • Define Your Sales Strategy : Outline the approach and tactics your sales team will use to reach and convert customers. This may involve direct sales, channel partnerships, online sales, or a combination of strategies. Specify your sales process, including lead generation, qualification, nurturing, and closing.
  • Expand Your Customer Base : Identify opportunities to expand your customer reach. Consider targeting new customer segments, entering new geographic markets, or exploring untapped market niches. Develop strategies to attract and engage these potential customers.
  • Penetrate New Markets : Assess the feasibility of expanding into new markets or verticals. Market research will help you understand the dynamics, competition, and customer needs in these markets. Adapt your marketing and sales strategies accordingly to effectively penetrate and capture market share.
  • Innovate Products/Services : Continuously evaluate and enhance your product or service offerings to meet evolving customer demands. Identify areas for innovation or improvement and develop a roadmap for launching new features, versions, or complementary offerings.
  • Perform a SWOT analysis : By conducting a sales SWOT analysis , you will gather valuable insights to enhance your department’s performance. This analysis involves evaluating your company’s strengths, weaknesses, opportunities, and threats, enabling you to identify areas for improvement and capitalize on advantageous factors in the market.

Here’s a hack to get you organized – Get right into it with the help of these growth strategy templates and strategic planning templates :

financial business plan for startup

Operational Plan: How Your Startup Will Run

Define an efficient and scalable operational plan, keeping in mind the following points:

Defining an Efficient and Scalable Plan

Outline the day-to-day operations, including processes, timelines, and necessary resources.

Legal Considerations for Your Startup Business

Identify any legal requirements or considerations, such as licenses, permits, or regulations that may apply to your startup.

Key Elements of Supply Chain Management and Logistics

Discuss supply chain and logistical aspects relevant to your business. Include details on how you plan to manage and scale these processes.

Here’s a kickstart on how you can structure your operating plans:

financial business plan for startup

Financial Projections: Crunching the Numbers

A startup’s financial projections are vital in securing investor buy-in. This section should address:

The Importance of Financial Forecasting and Budgeting

Explain the significance of accurate financial forecasting, budgeting, and the assumptions made in your projections.

Identifying Key Performance Indicators (KPIs)

Highlight the KPIs used to gauge your business’s financial health and growth trajectory.

Outlining Funding Requirements

Detail the amount and type of funding your startup requires , including how the funds will be allocated and how this investment positions the company for growth.

financial business plan for startup

Team and Management Structure: Building Your Dream Team

Your startup’s success depends on the people behind it. This section should cover:

Tips for Building the Right Team

Share your strategy for assembling a skilled team that supports your startup’s vision and growth trajectory.

Founders’ Background and Roles

Provide an overview of the founders’ backgrounds, their roles within the company, and how their skills contribute to the startup’s success.

Organizational Structure and Key Management Personnel

Outline your startup’s organizational structure, including any key management personnel who play a pivotal role in day-to-day operations.

Appendices and Supporting Documents: Backing Up Your Plan

Include any other relevant supporting documents, such as:

  • Research data, market analysis, or competitor analyses.
  • Financial statements, budgeting or forecasting data, and other financial documentation.
  • Legal documents, agreements or contracts, and any patent or trademark information.

Finally, remember to review and update your business plan regularly as the industry, market, and competitive landscape evolve!

1. Why is a business plan essential for a startup?

A startup business plan is crucial for a startup because it provides a framework for strategic decision-making, facilitates financial planning, helps assess risks, aligns teams, communicates your vision, and ensures effective resource allocation. 

2. What should a startup business plan include?

A startup business plan should include:

  • Vision and Direction : Set clear goals and objectives, and outline strategies to achieve them. With a well-defined plan, you will stay focused, make informed decisions, and ensure alignment with your vision.
  • Market Analysis : A business plan necessitates thorough market research to understand your target market, identify competition, and assess product/service demand. These insights enable you to tailor offerings, meet customer needs, and gain a competitive edge.
  • Financial Planning : By constructing a financial roadmap through projected statements such as income, cash flow, and balance sheets, a business plan unveils the expected revenues, expenses, and profitability. This comprehensive planning not only anticipates challenges and sets realistic goals but also serves as a magnet for attracting investors and securing funding.
  • Risk Assessment : Devise strategies for risk mitigation and contingency planning. By proactively doing this, you can significantly enhance the likelihood of success by anticipating and effectively addressing potential obstacles.
  • Communication and Team Alignment : From fostering effective communication with both internal and external stakeholders to aligning team members and showcasing your startup’s unique value proposition, a business plan plays a crucial role. It enables you to articulate target market insights, competitive advantages, and growth strategies to potential investors, partners, and employees.
  • Resource Allocation : A business plan helps you identify the resources required to launch and operate your startup successfully. It includes an assessment of your human resources, technology needs, infrastructure requirements, and other key resources. By understanding your resource needs, you can allocate them effectively, ensuring that you have the necessary assets to execute your business strategy.
  • Adaptability and Flexibility : Your business plan should be flexible enough to accommodate changes and adapt to new circumstances. Startups operate in dynamic environments, and a well-designed plan allows you to monitor progress, evaluate outcomes, and make adjustments as needed. This agility enables you to seize new opportunities and navigate challenges effectively.

3. What is the ideal length for a startup business plan?

The optimal length for a startup business plan typically depends on the specific requirements and intended audience, but a concise and focused plan of around 20 to 30 pages is often recommended.

4. How to write a good startup business plan?

To write a good and effective startup plan, include an executive summary, company description, market analysis, detailed products/services description and a clear marketing and sales strategy. Also incorporate a comprehensive financial plan, outline your organizational structure, and demonstrates your team’s expertise and capabilities. Your plan should be well-researched, concise, and compelling, with a focus on your company’s unique value proposition and market opportunity, making it attractive to investors and stakeholders.

Utilizing Venngage templates & other tools for success

A visually appealing and professional business plan needn’t be a daunting task. Leverage tools like Venngage Business Plan Maker for effective templates that cater to various industries and streamline the process. 

  • Leveraging Venngage for Visually Appealing and Professional Business Plans

Venngage offers a range of templates designed specifically for business plans, allowing you to craft a polished and visually engaging plan without any design experience. Simply choose a template, customize it to suit your startup’s branding, and populate it with your content.

  • Exploring Additional Resources and Tools for Entrepreneurs. In addition to Venngage, several other resources and tools can assist entrepreneurs in crafting the perfect business plan. Examples include:
  • Small Business Administration (SBA) – Offers guidance on writing business plans and provides templates and resources for each section.
  • SCORE – A nonprofit organization providing mentorship, workshops, and other resources for entrepreneurs.
  • Industry-specific resources – Research relevant professional organizations, industry publications, and blogs to stay up to date on industry trends and insights.

Embarking on the entrepreneurial path may present formidable challenges, yet it offers abundant rewards in various aspects. Embrace the art of continuous learning, delving not only into the essence of your business idea but also immersing yourself in the vast world that surrounds it. Cultivate a genuine passion for understanding every facet of your enterprise, for it is through this journey of exploration that you will uncover invaluable insights and experience the true fulfillment of entrepreneurship.

financial business plan for startup

Startup financial models - 12 templates compared

Posted by Stéphane Nasser | April 20, 2020

financial business plan for startup

As a founder, there comes a time when you need a business plan, complete with financial forecasts, income statements, and fancy graphs that will impress your investors.

Don't build it from scratch - use an existing model.

A financial model allows you to draft financial projections easily, fast, and in a professional manner. A great template will also force you to think through all the aspects of your project and make sure you really get the financial logic behind your business.

It can be annoying but trust me, it's worth your time.

This post compares the top 12 templates of financial models for SaaS startups. I have personally tested each model. I have ranked them on 40+ items along 5 categories. I've looked at both spreadsheets and SaaS apps, and both free and paid solutions.

If you are looking at building your SaaS financials, this article is for you.

Table of Contents

Methodology - what makes a great financial model for saas startups.

Here is the methodology I used to build this benchmark.

I compared 40 points across 5 categories: (a) financial statements, (b) analysis capabilities, (c) revenue modeling, (d) cost modeling, (e) extra features. A detailed analysis of each model is available below. In each case, I tested the software/spreadsheet myself.

Criteria 1: Financial statements

  • Time scale : Are the statements over 1 year, 3 years or more? You usually want 3 years as a minimum when you speak with professional investors.
  • Income statement : Does the template include an income statement? You usually want a monthly income statement, at least for year 1.
  • Cash flow statement : Same as income statement
  • Balance sheet : Same as income statement
  • GAAP/IFRS : Are the statements compliant with GAAP and/or IFRS rules?
  • Currency : How many currencies are available?

Criteria 2: Analysis capabilities

  • Financial analysis : Number of typical financial metrics included e.g. breakeven point, quick ratio, average inventory, etc.
  • SaaS analysis : Number of typical SaaS metrics included e.g. MRR growth, SaaS magic number, CAC/LTV, etc.
  • Graphs : Number of built-in graphs
  • Costs by P&L category : Does the template break down costs into P&L categories (CoGS, RD, G&A, etc.)
  • Costs by departments : Does the model break down costs into departments (sales, marketing, CS, engineering, etc)
  • VS Scenarios : Does the template allow you to compare multiple scenarios?
  • VS Industry comparables : Does the template compare your financials against industry comparables?
  • VS Actuals : Does the template allow you to run your model versus your actual numbers?

Criteria 3: Revenue modeling

  • New client acquisition : How do you enter new clients into the model? Possibilities include: entering a number manually for each month or year (it sucks); autofill the model from a base number and a growth rate (sucks a bit less); autofill several streams - each stream represents a different type of client e.g SMB/enterprise (better); or even fully model each acquisition channel (the best, very rare)
  • Offerings : How many offers can you define and how precisely can you model them? This includes the possibility to create one-off offers, recurring offers, or a combo, but also the possibility to create introduction times and end times for specific offers.
  • Pricing model : How many pricing models can you define and how precisely: tiers (free, basic, premium), revenue models (per seat, per usage, etc), automatically increase or decrease the plans price over years.
  • Existing clients : Can you model expansion, contraction, churn, reactivation?
  • Commitment : Can you model monthly VS yearly VS multi-annual contracts?
  • Service revenue : Can you model punctual service revenue on top of all the other pricing models and offerings?
  • Enterprise specific : Does the template offer specific features to model complex enterprise sales, such as landing/expansion, custom product developments, various sales cycles, etc?

Criteria 4: Costs modeling

  • Direct labor costs : The best templates allow you to correlate direct labor costs with relevant metrics. For example, your sales staff is calculated based on forecasted income and sales target per account executive. Same for customer success payroll with number of customers and workload target per CS staff.
  • Direct non-labor costs : just like with labor costs, the best templates allow you to link some direct non-labor costs with relevant metrics. For instance, server costs can be a % of MRR.
  • Indirect labor costs : same as above. Even for indirect costs, some templates find smart ways to tie them to some aspect of the business.
  • Indirect non-labor costs : same as above
  • Payment terms : Can you define the payments terms with your vendors and suppliers? May be useful if there is a hardware component to your offer.
  • Hardware-friendly : This is a special mention for templates that model things like shipping costs, inventory delay, etc.

Criteria 5: Extra features

  • Documentation : Is there proper documentation in the model and on the website? Are there good explainer videos? What kind of direct support (chat, email) comes with the template?
  • Languages : In what language is the template available?
  • Third-party integration : Third-party integrations can be useful to input or update data over time, or to display advanced graphs.
  • Excel spreadsheet : Can you access your financials as a Microsoft Excel spreadsheet? This is a must if you need to share it with investors.
  • Google Sheets : Does the model work in Google Sheets? Not all models that work in Microsoft Excel work in Google, so you may want to consider that point.
  • Editable formulas : Some templates do not allow you to modify formulas - which is a massive bummer when it comes to customization.

Granted, it's not a perfect methodology. One could argue forever about whether cap tables should be included in a startup financial model. But it's the best I could come up with - without being a finance nerd myself :)

Disclaimers: affiliation, impartiality, and non-finito

Before jumping to the heart of the matter, please allow me three disclaimers:

  • Affiliation: Some links in the article are affiliated - which means that if you end up buying a template through one of those links, OpenVC will get a few $$$. It doesn't cost you anything, and it allows us to keep writing useful articles for you.
  • Impartiality: Regardless of whether there is a referral in place or not, I am committed to providing you with an honest opinion. We take great pride in being an independent, honest, and trusted source of information for entrepreneurs.
  • Non finito: This is a non-finite work. We are happy to update the article if you bring new, relevant information to our knowledge. We are also happy to fix any mistake or clarify any confusion that you may find in the article.

1. "FISY Innovation Plan" by Remi Berthier

Fisy Innovation Plan, by Rémi Berthier

For years, this template has been the go-to financial model for French entrepreneurs. However, it didn't age that well.

Analysis capabilities are limited: only a handful of financial metrics, zero SaaS metrics, a couple of graphs, and it's impossible to categorize costs. Modeling, be it for revenue or costs, is all too basic and requires a lot of manual input. Also, it's entirely in French.

Having said that, it remains a free-of-charge, easy-to-use, easy-to-customize template that covers all the basics while including specificities to the French ecosystem such as CIR, JEI, etc. It also offers a detailed page of instructions on the website.

This model makes a lot of sense for French entrepreneurs looking for a simple solution. For the others, keep on reading.

Edit 2023: I've re-downloaded the template in 2023 and didn't notice any significant change versus the 2017 version I had initially reviewed, so I kept my review untouched.

Fisy income statement

2. "SaaS Financial Plan 2.0" by Christoph Janz

SaaS Financial Plan 2.0, by Christoph Janz

This template was built by SaaS apostle Christoph Janz, and you can tell. It packs a punch of SaaS knowledge in a sleek, clear spreadsheet. You'll find lots of good stuff: basic/pro/enterprise plans, churn/upgrade/downgrade, an elegant client acquisition model and a wealth of graphs and charts.

It's not all rosy, though. You want a 5 years forecast? No, you only need 2. You want to sell annual pro plans? Too bad, pro plans are monthly and that's that. Also, no balance sheet.

This template works great if you are a typical SaaS startup and fits the vision that Christoph put into his financial plan. If not, you may be better off considering templates with broader horizons.

Edit 2023: Based on the Dropbox information, the template has not been modified since my first review in 2017, so I kept it untouched.

SaaS financial plan by Christoph Janz

3. "SaaS Financial Model 3.0" by Baremetrics

SaaS Financial Model 3.0, by Baremetrics

I reviewed this model for the first time in 2017, when Jaakko Piiponen was its sole author. Since then, the Baremetrics team has substantially updated it. This new 2023 review should finally do it justice.

This SaaS Financial Model 3.0 is geared towards people who want to pilot their SaaS business, as opposed to just raising funds. Its underlying philosophy is that you need to match actual numbers with your forecasts for maximum piloting accuracy. To reach that objective, this model wants you to frequently pull data from your accounting software (e.g. Quickbooks, Xero…) and will project many assumptions based on your last 3 months - what they call "Autopilot". It's a healthy approach, and if you're ok with the extra work, it may be the right one for you.

When it comes to financial statements, this model nails it: you get a monthly view of your P&L, cash flow, and balance sheet over 5 years. However, because this model is not designed for fundraising, it doesn't include a cap table, which may be a dealbreaker to some. The whole model is in USD - you can manually change to any other currency, but you'll have to click a lot….

The Baremetrics team has also beefed up the analysis capabilities. This new version packs up all the must-have financial and SaaS metrics (Churn, ARPC, LTV, Paid CAC, Blended CAC, CAC:Payback time, CAC:LTV, MRR Breakdown), plus 11 built-in charts. A very nice attention is the Chartbuilding tab, which groups all the numbers in a clean format so you can build additional custom charts effortlessly. Like Janz's and Murray's models, you can break down expenses by category (engineering, marketing, etc.). The icing on the cake: this SaaS financial Model 3.0 is the only free model of this benchmark that lets you build a "worst case scenario" on top of your base case - and of course, compare both scenarios to your Actuals. Kudos to that!

Revenue modeling and cost modeling follow the "Autopilot" philosophy described above, with a few notable twists. For instance, the Acquisition model can be augmented with a separate "Marketing funnel" sheet (also provided by Baremetrics, also free) that models a proper 7 step funnel (visitor, signups, MQL, SQL, opportunities, trial, customer) and distinguishes between paid and organic leads. Your CMO will love it. Similarly, each expense line can be tied to specific variables to reflect dependencies.

All in all, this model by Baremetrics is a very strong contender. The only weakness I found relates to modeling complex offers, such as a Basic, a Premium and a Pro plan. It's just not possible. Even modeling annual plans seems to take a bit of work using the "Deferred revenue" tab. On the upside, this SaaS Financial Model 3.0 models expansion, contraction, churn, and even reactivation, so it's a tit for tat.

If you're looking for a free model that cares about accuracy to pilot your SaaS business the year round, and you don't mind getting your hands dirty a bit, then this is the one. Support is limited to a well-written, opinionated page of instructions, and you can contact the creators on Twitter. The model is available on Excel and Google Sheets, and all the formulas are editable.

SaaS P&L and metrics by Piipponen

4. "Standard SaaS Financial Plan for Startups and SMBs" by Ben Murray

SaaS Financial Plan for Startups and SMBs, by Ben Murray

This template published by Ben Murray, AKA the SaaS CFO, has a lot in common with Chris Janz's model: it's free, it's SaaS-centric and it's really good overall.

But that's where similarities stop. Let's look at what differentiates them:

  • Cost modeling: Janz does a much better job as many costs are tied to activity metrics. With Murray, you have to fill it all manually. Janz 1 - 0 Murray
  • Commitment: Murray allows you to define which plans are annual and which are monthly. Janz does not. Janz 1 - 1 Murray
  • Client acquisition: Murray wants you to manually input new clients each month, where Janz includes 3 acquisition channels. Janz 2 - 1 Murray
  • Murray also allows you to add service revenue and offers up to 5 years of forecasts. Janz 2 - 2 Murray
  • Since its latest update, Murray's model also allows you to input your actual number and compare them with your forecasts. Janz 2 - 3 Murray

At the end of the day, Murray's SaaS template is great - maybe the best amongst the free templates. It is a bit disappointing when it comes to modeling new client acquisition and costs, though.

To explore more powerful (and paid) templates, read on!

growth model by the SaaS CFO

5. "SaaS Startup" by Pro Forma

SaaS Startup Kit, by Pro Forma

The SaaS startup kit is the first paying template we're looking at: one-time $99.

Because you're paying, you obviously get a lot more in return: balance sheet, cap table, GAAP/IFRS compliance, 161 currencies to choose from, a ton of financial metrics and graphs, and advanced capabilities to model your costs and your revenue, including for hardware startups.

Now, because we are paying, we are a lot pickier. And I see 3 problems with this SaaS Startup Kit. First, you cannot account for upgrades and downgrades (you can model churn, though). Second, you cannot break down costs by P&L categories or departments. Third, the formulas are "locked ' so you cannot edit them. That's a big problem if, like me, you like looking under the hood. But maybe you don't care?

SaaS model by Pro Forma

All in all, I cannot tell you not to look at the SaaS startup kit. It has a lot going for it, and at $99, it's priced right. But if you can stretch your budget a little more, look at the next model - it may be the right one for you.

6. "SaaS Financial Model" by Taylor Davidson

"SaaS Financial Model" by Taylor Davidson

Let me start right off the bat: this "SaaS Financial Model" by Taylor Davidson is one of the best templates out there.

For $149, you get all the financial statements you may wish for, laid out over 5 years, and GAAP-compliant. Additional tabs are built-in for fundraising (assess needs and uses), valuation (ownership, DCF, waterfall exit, ROI), variants (simplified scenarios), and impact (for purpose-driven startups). Bonus point: the model works in Microsoft Excel and Google Sheets, supports all currencies, and is fully editable.

In terms of analysis capabilities, the template generates boatloads of financial and SaaS metrics, as well as 20+ beautiful graphs. Costs can be broken down by departments and P&L categories so you can make sense of all that good stuff. SaaS experts will especially appreciate the granularity provided by monthly cohort analysis - a rarity!

Modeling revenue and costs is extremely versatile. Instead of pre-modeling everything for you, the template provides you with very unique features (Pricing, Pipeline, Drivers) that allow you to customize it to your needs. Here are a few examples of what you can do:

  • You can build as many subscription plans as you want.
  • Contract length is not limited to monthly or annual but can be anything you want.
  • Billings are separate from contract cycles, so can do an annual contract with quarterly billings, or 3-year contract with annual billings, or annual contract with monthly billings
  • All costs, direct and indirect, labor and non-labor, can be tied to relevant activity metrics (revenue, headcount, etc.) which is what you would expect from this kind of template.
  • All costs can also be tied that are *not* tied to an activity metric, say periodic costs that occur quarterly or annually, or costs that increase a % over time, or costs that are a % of salaries, or a % of revenues, for example. This is all built-in within the Drivers sheet and an absolute delight to use.
  • For Enterprise sales, you can model a good old Pipeline in the Pipeline sheet and attribute different numbers of seats and "likelihood to close" to each deal.

True, it takes a bit of time to wrap your head around the internal logic of that model. But once you master it, there is virtually no limit to what you can do.

Thankfully, this financial model is well-documented. The website includes a long, detailed "Getting Started" page as well as specific articles and videos for technical points. The highlight is definitely the email support - I've consistently received detailed replies within 24 hours - at zero extra cost. Kudos to that.

Long story short - if you are willing to shell out $149 for a SaaS financial model, Taylor Davidon's template is arguably one of the absolute best you can get your hands on. The other one is the model built by Alexander Jarvis - read on to learn about it.

financial model by Taylor Davidson

7. "SaaS: SME & Users" by Alexander Jarvis

8. "saas: enterprise, sme & users" by alexander jarvis.

"SaaS: SME & Users" by Alexander Jarvis

"SaaS: Enterprise, SME & Users" by Alexander Jarvis

It's hard to write a serious review about this template - everything about it is absolutely ridiculous. It is ridiculously rich, ridiculously detailed, ridiculously powerful. It's the kind of template that you use when you want to make a statement, like impress your investors or make your CFO feel irrelevant. It's heavy, bold, and over-the-top, in the best way possible. Brace yourselves, let's dive in.

This template by Alexander Jarvis comes in 2 versions. The "SaaS: SME & Users" is perfectly fine for most SaaS businesses. It sells at $319. The "SaaS: Enterprise, SME & Users" retails at $1,299 and includes extra logic to model enterprise sales. Because of their complexity, both models only work in Microsoft Excel (no Google Sheets).

In return for your money, you get the most advanced modeling capabilities - period.

  • Each acquisition channel is modeled in great details: paid, organic, blog, social, emailing, and channel partners. Each channel can be assigned its own conversion rate from visitor to user. You can also differentiate between the customers that self-onboard and those who require sales intervention.
  • You can design composite offerings based on usage fee, monthly fee and/or a one-time service fee. The templates allow 3 paid plans - typically basic, premium, pro - as well as a free trial plan, and each of these plans can exist with a monthly or annual commitment.
  • Customers can upgrade, downgrade or churn, and you can even schedule module releases at different points in time, so you create new revenue streams over the years.
  • All costs, direct and indirect, labor and non-labor, are modeled in a clever way i.e. they are tied to relevant activity metrics

I cannot stress enough how detailed this model is. Here is an example: the "email marketing" tab (yes, there is such a thing) takes into account 12+ inputs including stuff like the % of recipients who will share the newsletter with their friends. I love this kind of detail because it gives actionable points when thinking about execution. It also makes it easier to defend your numbers in front of investors because you can explain the underlying assumptions. If it's too much for you, you can always deactivate the advanced fields with the switch and focus on the core input.

If you buy the $1,299 version, you get an extra slew of tabs specifically dedicated to enterprise sales in all its complexity: enterprise-specific products and offerings, geographies, sales cycles, "land and expand", custom development, etc. If you are building the next Oracle or Palantir, that stuff alone is invaluable.

Documentation is ok. Instructions and comments are included inside the template, but not much in terms of FAQ/articles on the website. Having said that, I particularly appreciated the tutorial videos: one 28-min overview and 20 shorter videos that each cover a specific tab.

You want more? Time to talk about analysis capabilities. Alexander Jarvis' model is most lavish when it comes to that point. 50+ graphs are readily available - and that's without counting the sparklines that are peppered throughout the sheet. Because modeling is so detailed, the template can provide advanced SaaS metrics such as marketing leverage or expansion % of new MRR. Of course, costs can be allocated to P&L categories and departments so you really understand what's going on in your model.

When it comes to financial statements, the $319 version gives you only 3 years of forecasts, with no balance sheet and no cap table. The $1,299 version does a bit better with 5-year forecasts, but still no sign of balance sheet nor cap table. Some would argue that an early-stage startup doesn't need formal financial statements... However, this template does include a tab to compare your forecasts to your actuals, and another tab listing down industry metrics - both are very welcome additions.

If you want the best spreadsheet ever, it boils down to comparing Taylor Davidson's and Alexander Jarvis' templates, and picking the one that fits you the most. See the final section "Conclusion" for a side-by-side of both models.

SaaS forecasts by Alexander Jarvis

However, some prefer using a specialized SaaS app to build their startup financial model. If that's your case, check out the last 4 models.

9. "EY Finance Navigator" by Alex and Wout

EY Finance Navigator, by Alex and Wout

The Finance Navigator was developed by Alexander Matthiessen and Wout Bobbink from EY's Dutch office. It's a SaaS app: you pay a monthly subscription to access an online tool. It's a fundamentally different approach from the spreadsheet-based models we've explored so far.

The Finance Navigator costs $30 per month without commitment or $380 over an 18 month period. For that price, you get very exhaustive financial statements: income statements, cash flow statements, and balance sheets over 10 years - no cap table though. All currencies are available and you can export the statements to a clean, well-designed spreadsheet format (only numbers, no formulas).

Documentation is good, with in-app guidance, website posts, a Q&A, and a 37 min walkthrough video. The tool was clearly thought to be user-friendly and the onboarding is best-in-class. You will have zero difficulties using EY's Finance Navigator whatsoever.

Unfortunately, simplicity is a double-edged sword. Revenue and cost modeling is super basic. For example, revenue is defined as a base number for month 1, then a monthly growth rate. No channels, no conversion rate, no pricing plans. The same goes for costs: you cannot tie costs to specific activity metrics, so you have to input them manually. Because it's a SaaS application, you cannot customize the model by adding fields or modifying formulas. And because it's so basic, there is only the bare minimum in terms of analysis capabilities.

At the end of the day, EY's Finance Navigator holds a lot of promises. UX is great and they have a couple of nice features like comparables and scenarios. The product has evolved over the years, adding up features and getting more usable. In my estimation, it's not quite enough to be used by advanced SaaS entrepreneurs. The product is geared towards traditional businesses - think bakery, restaurant, consulting, who just want clean and easy financials. Not the right pick for SaaS people - yet. I'd love to revisit the tool in a year and see what progress has been made.

income statement by EY

10. "Liveplan" by Palo Alto Software

Liveplan, by Palo Alto Software

Liveplan sells its financial modeling SaaS app at $20 per month ($360 over 18 months), which makes it a close competitor to EY Finance Navigator.

Starting with the strong points, Liveplan offers exhaustive statements over 5 years: income statements, cash flow statements, and balance sheets. Compared with EY's model, you have a bit more control over revenue modeling: offerings can be defined as recurring fees, billable hours, and a one-time upfront fee can also be added. Pricing can be increased automatically over time, churn can be factored in, and you can model monthly or annual plans.

When looking at cost modeling, you can adjust payment terms for clients and suppliers. There are also specific variables for hardware products. Documentation is just fine, with a tutorial video per section embedded directly in the app, as well as plenty of instructions. Liveplan exists in 5 languages, and integrates with Quickbooks, which allows importing your actual numbers and comparing them with your forecasts. You can also export your financials into a (numbers-only) spreadsheet to share with your investors.

Now, although Liveplan's software has more powerful modeling capacities than EY's, it remains insufficient in my estimation. Here are just a few examples.

  • Direct labor costs can be set as a % of revenue, but do not update the number of employees accordingly.
  • Indirect costs can only be set as a constant, a % of overall revenue, or a % of a specific revenue.
  • New client acquisition is just manual input - as in you manually input "2" clients in March and "4" clients in April. There is no channel modeling whatsoever.
  • Costs cannot be broken down by P&L categories nor departments.

When modeling is too superficial, it translates into poor analysis capabilities. In Liveplan's case, you do have a dozen financial metrics available (net cash flow, account payable, cash on hand…) and another dozen graphs. But SaaS metrics are absent, which is a bummer for SaaS entrepreneurs.

At the end of the day, LivePlan was built for non-tech entrepreneurs. Perfect for a bike shop owner, but not quite there for SaaS people.

Don't take my word for it: there is a 60-day trial, so give it a spin for free and make up your own mind.

revenue by Liveplan

11. "Summit" by Matt Wensing

Summit, by Matt Wensing

Summit is a young startup (founded 2019) that brings a fresh take on the whole financial modeling thing with a SaaS solution.

Let's make it clear - Summit is not meant for fundraising. Forecasts on Summit are made for an 18-month period only. Costs cannot be allocated to P&L categories and departments, nor can you differentiate between labor/non-labor or direct/indirect costs. Therefore, you won't be able to generate any financial statements that your investors may require . Hell, you can't even export a spreadsheet!

So why talk about Summit? Because Summit is pretty awesome when it comes to piloting your SaaS startup with a financial model. Here is how it works. First you connect your live metrics (Stripe, Baremetrics, etc.) to your Summit account. This allows Summit to derive your future growth from the current trends. The next step consists in optimizing that future growth. To do that, you define a baseline scenario around 20+ metrics from sales, product, finance, then you play around with those variables to maximize your MRR or any other metric you like. What if we increase our close rate? What if we raise funds and funnel that money into paid ads? You instantly get clear answers. What's more, the clean dashboards and convenient built-in comments feature makes it easy and even pleasant to run those analyses and share with your team. It's a really fresh experience - no comparison possible with fuddy-duddy spreadsheets.

Summit is still a young product and there is room for improvement: currencies, tax rates, expansion and contraction of existing clients, one-off revenue. In particular, client acquisition would greatly benefit from more granularity and native integrations with social media accounts for instance.

At the end of the day, Summit is not meant to build financial statements, but to make decisions in a data-driven way. It's such a refreshing approach in the space that I highly recommend trying it out. Bonus point: it's 100% free for now, so it's a no-brainer.

forecasts by Summit

12. "Causal" by Taimur and Lukas

Causal, by Taimur and Lukas

At first glance, Causal seemed very similar to Summit. It's also a SaaS solution, also founded in 2019, also bringing a new approach to modeling. But that's where the comparison stops because the philosophy behind Causal is quite unique.

Causal is not just a financial modeling tool for SaaS startups. It's a modeling tool that aims at replacing Excel for every modeling need you may have. This means that (a) Causal is super versatile and goes much deeper than Summit, and (b) Causal is much more complex with a steeper learning curve than Summit.

Looking at revenue and cost modeling, you can model anything you want on Causal with an interface that's 10x more modern and user-friendly than a spreadsheet. The same thing goes for analysis capabilities: you can generate dashboards, tables, and graphs for absolutely anything - including any financial statement your investors may want. You can also connect live data sources (Stripe and Google Sheets for now, more to come) to automatically update your models with real-time metrics.

As a SaaS entrepreneur, you don't have time to build a model from scratch. Lucky you, Causal has built-in templates - including two SaaS models built by Taylor Davidson himself (see template #6). You are then able to augment or fine-tune those models to suit your specific needs.

In terms of documentation, there are a few videos, a live chat as well as a walkthrough when you start a new model. That's not much, but Causal assumes that you are a modeling "nerd" and that your usual work environment is massive spreadsheets. If that's the case, you'll be just fine. Assuming you have the time and desire to put in the hours to learn a new tool, Causal may very well be the ultimate platform for financial modeling.

SaaS model by Causal

New models - reviews coming soon

"financial model template for startups" by basetemplates.

Financial Model Template, by BaseTemplates

Conclusion: this is the best financial model for SaaS startups

startup financial model benchmark

Best free spreadsheet

If you want a "good enough" model but are not willing to pay for it, go for Ben Murray's (model #4) or Chris Janz's (model #2) . Customize them a bit to offset their weaknesses.

See below a side-by-side comparison of the differences between both models.

best free financial spreadsheet for SaaS

Best paid spreadsheet

If you want the best financial model spreadsheet out there and are willing to pay for it, go for Taylor Davidson's (model #6) or Alexander Jarvis' (models #7/#8) . They are by far the best stuff on the market today.

See below a side-by-side comparison of the differences.

best paid financial spreadsheet for SaaS

Best software

If you want to experience the future of financial modeling, go for Summit (model #11) or Causal (model #12) - while keeping in mind that both are very different.

best app for financial modelling

Thanks for reading. Don't hesitate to leave a question in the comments, I try to reply personally to each one of them.

OpenVC is a radically open platform that helps tech founders connect with the right investors.

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4 Key Financial Statements For Your Startup Business Plan

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  • September 12, 2022
  • Fundraising

financial statements startup business plan

If you’re preparing a business plan for your startup, chances are that investors (or a bank) have also asked you to produce financial projections for your business. That’s absolutely normal: any startup business plan should at least include forecasts of the 3 financial statements.

The financial projections need to be presented clearly with charts and tables so potential investors understand where you are going, and how much money you need to get there .

In this article we explain you what are the 4 financial statements you should include in the business plan for your startup. Let’s dive in!

Financial Statement #1: Profit & Loss

The profit and loss (P&L) , also referred to as “income statement”, is a summary of all your revenues and expenses over a given time period .

By subtracting expenses from revenues, it gives a clear picture of whether your business is profitable, or loss-making. With the balance sheet and the cash flow statement, it is one of the 3 consolidated financial statements every startup must produce every fiscal year .

Most small businesses produce a P&L on a yearly basis with the help of their accountant. Yet it is good practice to keep track of all revenues and expenses on a monthly or quarterly basis as part of your budget instead.

When projecting your financials as part of your business plan, you must do so on a monthly basis. Usually, most startups project 3 years hence 36 months. If you have some historical performance (for instance you started your business 2 years ago), project 5 years instead.

financial business plan for startup

Expert-built financial model templates for tech startups

Financial Statement #2: Cash Flow

Whilst your P&L includes all your business’ revenues and expenses in a given period, the cash flow statement records all cash inflows and outflows over that same period.

Some expenses are not necessarily recorded in your P&L but should be included in your cash flow statement instead. Why is that? There are 2 main reasons:

  • Your P&L shows a picture of all the revenues you generated over a given period as well as the expenses you incurred to generate these revenues . If you sell $100 worth of products in July 2021 and incurred $50 cost to source them from your supplier, your P&L shows $100 revenues minus $50 expenses for that month. But what about if you bought a $15,000 car to deliver these products to your customers? The $15,000 should not be recorded as an expense in your P&L, but a cash outflow instead. Indeed, the car will help you generate revenues, say over the next 5 years, not just in July 2021
  • Some expenses in your P&L are not necessarily cash outflows. Think depreciation and amortization expenses for instance: they are pure artificial expenses and aren’t really “spent”. As such, whilst your P&L might include a $100 depreciation expense, your cash flow remains the same.

financial business plan for startup

Financial Statement #3: Balance Sheet

Whilst the P&L and cash flow statement are a summary of your financial performance over a given time period, the balance sheet is a picture of your financials at a given time.

The balance sheet lists all your business’ assets and liabilities at a given time (at end of year for instance). As such, it includes things such as:

  • Assets: patents, buildings, equipments, customer receivables, tax credits etc. Assets can be either tangible (e.g. buildings) or intangible (e.g. customer receivables ).
  • Liabilities: debt, suppliers payables, etc.
  • Equity : the paid-in capital invested to date in the company (from you and any other potential investors). Equity also includes the cumulative result of your P&L: the sum of your profits and losses to date

Whilst P&L and cash flow statement are fairly simple to build when preparing your business plan, you might need help for your balance sheet.

financial business plan for startup

Financial Statement #4: Use of Funds

The use of funds is not a mandatory financial statement your accountant will need to prepare every year. Instead, you shall include it in your startup business plan, along with the 3 key financial statements.

Indeed, the use of funds tells investors where you will spend your money over a given time frame. For instance, if you are raising $500k to open a retail shop, you might need $250k for the first year lease and another $250k for the inventory.

Use of funds should not be an invention from you: instead it is the direct result of your cash flow statement . If you are raising for your first year of business, and your projected cash flow statement result in a $500k loss (including all revenues and expenses), you will need to raise $500k.

For instance, using the example above, if you need $500k over the next 12 months, raise $600k or so instead. Indeed, better be on the safe side in case things do not go as expected!

financial business plan for startup

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6 Small Business Financial Statements for Startup Financing

Financial Statements You'll Need for Your Startup Business Plan

You're ready to start your small business and your're working on a great business plan to take to a bank or other lender. A key part of that plan is the financial statements. These statements will be looked at carefully by the lender, so here are some tips for making these documents SELL your business plan . 

Financial Statements You Will Need

You may need several different types of statements, depending on the requirements of your lender and your own technical expertise. 

The statements you will certainly need are:

  • A startup budget or cash flow statement
  • A startup costs worksheet
  • A pro forma (projected) profit and loss statement
  • A pro forma (projected) balance sheet 

Your lender may also want these financial statements: 

  • Sources and uses of funds statement
  • Break-even analysis

Putting these Statements in Order

First, work on your startup budget and your startup costs worksheet. You'll need to do a lot of estimating.

The trick is to underestimate income and overestimate expenses, so you can create a more realistic picture of your business over the first year or two.

Then work on a profit and loss statement for the first year. A lender will definitely want to see this one. And, even though it's not going to be accurate, lenders like to see a startup balance sheet. 

Some lenders may ask for a break-even analysis, a cash flow statement, or a sources and uses of funds statement. We'll go over these statements so you can quickly provide them if asked.

Business Startup Budget

 A startup budget is like a projected cash flow statement, but with a little more guesswork.

Your lender wants to know your budget - that is, what you expect to bring in and how much to expect to spend each month. Lenders want to know that you can follow a budget and that you will not over-spend. 

They also want to see how much you will need to pay your bills while your business is starting out (working capital), and how long it will take you to have a positive cash flow (bring in more money than you are spending). 

Include some key information on your budget:

  • What products or services you are selling, including prices and estimated volumes
  • Key drivers for expenses, like how many employees you'll need and your marketing initiatives  

A typical budget worksheet should be carried through three years, so your lender can see how you expect to generate the cash to make your monthly loan payments.

Startup Costs Worksheet

A startup costs worksheet answers the question "What do you need the money for?" In other words, it shows all the purchases you will need to make in order to open your doors for business. This could be called a "Day One" statement  because it's everything you will need on your first day of business. 

  • Facilities costs, like deposits on insurance and utilities
  • Office equipment, computers, phones
  • Supplies and advertising materials like signs and business cards
  • Fees to set up your business website and email
  • Legal fees licenses and permits

Profit and Loss Statement/Income Statement

After you have completed the monthly budget and you have gathered some other information, you should be able to complete a Profit and Loss  or Income Statement. This statement shows your business activity over a specific period of time, like a month, quarter, or year.

To create this statement, you'll need to list all your sources to get your gross income over that time. Then, list all expenses for the same time.

Because you haven't started yet, this statement is a called a projected P&L, because it projects out your estimates into the future.  

This statement gathers up all your sources of income, including shows your profit or loss for the year and how much tax you estimate having to pay.

Break-Even Analysis

A break-even analysis shows your lender that you know the point at which you will start making a profit or the price that will cover your fixed costs . The break-even analysis is primarily for businesses making or selling products, or to set the right price for a product or service.  

It's usually shown as a graph with sales volume on the X axis and revenue on the Y axis. Then fixed an variable costs (those you must pay) are included. The break-even point marks the place where costs are covered.

This analysis can also be useful for service-type businesses to show an overall profit point for specific services. If you include a break-even analysis, be sure you can explain it.

Beginning Balance Sheet

A startup balance sheet is difficult to prepare, even if there isn't much to include. The balance sheet shows the value of the assets you have purchased for startup, how much you owe to lenders and other creditors, and any initial investments you have made to get started. The date for this spreadsheet is the day you open the business.

Sources and Uses of Funds Statement

Large businesses use Sources and Uses of Funds statements in their annual reports, but you can create a slightly different simple statement to show your lender what you need the money for, what sources you have already, and what's left over to be financed.

To create this statement, list all your startup and working capital(on-going cash needs), how much collateral you will be bringing to the business, other sources of funding, and how much you need to borrow. 

Optional: A Business Requirements Document

 A business requirements document is similar to a proposal document, but for a larger, more complex project or startup. It gives a complete picture of the project or the business plan. It goes into more detail on the project that will be using the financial statements. 

Include Financial Statements in Your Business Plan

You will need a complete startup business plan to take to a bank or other business lender. The financial statements are a key part of this plan. Give the main points in the executive summary and include all the statements in the financial section. 

Finally, Check for Mistakes!

Before you submit your startup business plan and financial statements, check this list. Don't make these  common business plan mistakes !

Check all numbers for accuracy and consistency. Especially make sure the amounts you are requesting are specific and that they are the same throughout all the parts of your business plan.

SCORE.org. " How to Set Up and Maintain a Budget for Your Small Business ." Accessed Sept. 10, 2020.

SCORE.org. " Financial Projections Template ." Accessed Sept. 10, 2020.

Harvard Business Review. " A Quick Guide to Breakeven Analysis ." Accessed Sept. 10, 2020.

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How to Create an Effective Financial Plan in the Midst of Startup Chaos

Article contributors, underscore vc, james orsillo, in this article:, the big picture of startup planning, planning priorities by stage, the planning process for startups, pulling it all together.

So, your board is asking to see a budget or a forecast for your startup, or you need to present an updated business plan. Whether it seems daunting, exciting, or it just feels like a pain, planning is an important business practice.

But for an early-stage startup, a detailed plan might feel too rigid. After all, things change quickly, and you may be testing new strategies and striking out a lot. Chances are your plan will become outdated the day after you publish it. So what’s the point?

Despite a startup’s ever-evolving nature, planning gives you a set of expectations that you can operate against. It’s an opportunity to take stock of where you’ve been and look ahead to where you want to go, so you can build your company for the future.

As you start to plan out a budget or forecast, here are a few things to keep in mind.

The long-term goal for many startups is to get to a place where the business is predictable, scalable, valuable, and profitable. Companies go public when they achieve this mastery of their business.

“Without mastering your business, you won’t understand your customers, so you won’t build the right products, so you won’t bring it to market effectively,” says James Orsillo , CFO of Underscore VC . “There are a whole bunch of things that you just can’t do.”

This mastery develops over time, and it enables you to identify your key value drivers so you can grow at a healthy, scalable, predictable rate. With mastery, it’s clear what levers and buttons will produce consistent results. Establishing revenue certainty is one of the most important tasks to establish predictability. That’s where planning and forecasting for startups come in.

Planning is a tool to continuously align the sustainability of your company with your optimal growth rate. It’s an ongoing process that evolves with your business; you’re always planning—constantly reviewing, revising, and recalibrating.

Especially in the early days, planning is about setting targets and being able to hit them. But over time, you’re aiming to become more predictable, with reliable growth and performance. As you look ahead, you can expect some of the following priorities:

  • Seed: At this stage, you may be working to find Product-Market Fit and gain initial revenue traction. This could include customer discovery and fine-tuning your product. You’re probably still figuring out how to write a plan. What are your revenue drivers? What are your expenses? Your plan will outline how you’ll go about getting this initial traction.
  • Series A: Assuming you’ve reached PMF and you have some paying customers, you’ll start to build a healthy business around your product. At this stage, this could include generating sales momentum, building out your team, and fine-tuning your unit economics. “It’s more critical at this stage to be growing gangbusters on the top-line, but cash management should always be prominent on an executive dashboard that’s regularly reviewed by management,” says Eric Goode, VP of Finance at Hi Marley , which raised its Series A earlier this year (co-led by Underscore VC and True Ventures).
  • Series B: You’ve got the start of a healthy business. Now it’s time to double down on revenue growth. How many sales reps do you have? What’s their quota? How many of them hit quota? Your plan will likely outline how you’ll accelerate growth, while maintaining business health.
  • Series C +: Once you’re hitting impressive growth targets, you’ll keep scaling. Which markets will you hit? Will you expand to new geographies? Will you release new products? Who will you need to hire to make this happen? Your plan will underwrite this growth strategy.

By the time you’re at a later stage, you’ll have mastered a sense of predictability over your business. “Eventually, you’ll be able to say, ‘If I put in a dime, I’ll get out a quarter. If I push this lever, I’ll get this result’” says James.

“Early on when we had our first board meeting, I remember laboring for days over the board deck and deciding what to present,” says Jason Purcell, CEO of Salsify . “Then after that first meeting, I realized how stupid that was. We should just talk about what’s on our minds. From then on, we decided to use the board meeting for us.”

The same is true of planning. Your board will likely be asking for a budget on an annual basis. They’ll want to see your strategy and how it plays out in financial forecasts. But the planning and forecasting exercise is for yourself and your team.

Watch out: “Especially in the really early days, startups tend to be overly optimistic about sales,” says James. If you’re trying to hit a certain revenue target to woo investors or impress your board, you may be tempted to set an aspirational goal. “Then you’ll miss your targets, not have enough cash flowing in, and you’ll need to raise additional funds to keep the lights on.”

Always remember: This is a continuous process. Whatever plan or budget you create, you’ll be constantly reviewing, revising, and recalibrating.

As you map out your plan, consider the following guidelines:

1. Think Big-Picture and Long-Term

Of course, you won’t know everything. But you’ll need a sketch of your long-term strategy and goals. For some startups, that could include planning two funding rounds ahead.

Your investors will likely ask: What will you use this cash for? To answer that, you’ll need to know your key drivers of growth. Perhaps you need to out-build a competitor. Maybe you need to out-sell a competitor. Think of your long-term strategy as a cross-country trip. What’s your destination, and what path will you take?

This remains true even for public companies. “I think that there is a belief that public companies are focused solely on the current quarter or current year performance,” says Kate Bueker, CFO of HubSpot . “Good planning is anchored in a long-term strategy, and the budget process is about how to take the right steps in that direction.”

2. Outline Key Milestones

Thinking back to your best lever of growth, what will be your key milestones ? This could include acquiring a certain number of customers, raising a round of fundraising, or making an acquisition.

This sounds like, “To reach X, we need to hit A, B, C, and D milestones. Here’s how we think we’ll get from A to B, then B to C, then C to D.

If your startup is a plane, and your cash runway is fuel, how far can you fly?

3. Take Stock of Resources

To continue with the cross-country trip analogy: think about your cabin crew and equipment, estimate what they can accomplish, and decide what other resources you’ll need for a low-turbulence flight.

What do your current resources offer?

  • People: Who are your top performers, low performers, and those in between? What can they realistically accomplish in the next year? For example, if you’re a Founder/CEO who’s heavily involved in the sales process, are you really going to have the capacity to hit an aggressive sales target?
  • Infrastructure: Think through systems, processes, and technology. What’s working? What’s not?
  • Data: What new information have you collected? What have you learned?

What do you want to do with your resources?

  • Reflecting on your path to get from point A to B, what resources will you need to accomplish this goal? Perhaps you need to shift your positioning in order to appeal to customers up market. What people, infrastructure, and data will you need to make this happen?

What resources do you need that you don’t have?

  • Will your current resources carry you down your outlined path? If not, who do you need to hire? What cash do you have to hire them? From here, you can build out a hiring plan accordingly.

4. Think Through Contingencies

Once you’ve outlined your plan, strengthen it by thinking through contingencies. “It’s sometimes easy to rationalize why you’ve missed your target and accept a miss,” says James. “But if you can unemotionally recalibrate through contingency planning, you’ll make smart decisions.”

For example, Salsify’s 2020 forecast was off because of the impacts of Covid-19. The team’s detailed contingency planning enabled them to act decisively during a challenging time. “We were able to quickly come up with a model that did not take a lot of work,” says Mary Jefts, CFO of Salsify. “Having it already exist helped take the emotion out of what it would mean for the company and our teams.”

5. Select Your Metrics

Remember—planning is all about becoming a master of your business. That includes a holistic view of its health. There are plenty of SaaS metrics you can track, however, metrics don’t matter unless you can build a business.

“Metrics are the diagnostics of your business,” says James. As a starting point, take a look at these top SaaS metrics and determine which are most relevant to your business.

ARR tends to be a critical metric to track. “First and foremost, ARR is most important for us,” says Eric. “More specifically, the levers within ARR include New, Expansion, and Churn. It’s important to align on a reasonable mix of New and Expansion ARR throughout the plan year. This dictates how we approach hiring across the org, and fund marketing programs and customer success.”

The same is true even for public companies. “Our north star metric is net-new annual recurring revenue (NNARR) growth. It is the leading indicator of subscription revenue growth,” says Kate.

Watch out: While ARR is an important metric to measure growth, be sure to monitor the health of your underlying business in relation to other metrics. “Having strong ARR growth can be a sign of strength and momentum,” says James. “But if your Customer Acquisition Cost (CAC) is sky high, and your Gross Margins are bad, you’ll be hemorrhaging money underneath.” It’ll be extremely difficult to build a sustainable business that way. If your business isn’t healthy, “every customer win is a loss,” he adds.

6. Track Comparables

Once you’ve outlined your plan, consider looking at comparables—companies with a similar business model in a similar space that have reached one of your milestones.

“Given our growth rates and our belief that Salsify has the potential to be a public company, we picked a list of IPO comparables—enterprise-class SaaS companies that had gone public,” says Jason. “We look at up to three years of their financial data, and based on our growth rate, revenue, and expenses as a percentage of revenue, we compare ourselves against their metrics. These comparables are a way to validate our progress against our three-year plan.”

Especially as your business grows, collaboration and accountability become increasingly important. “At the Series A stage, more departments have been created, and therefore more leaders have emerged,” says Eric. “The ability to build a detailed, iterative plan with business leaders allows for more top-line and bottom-line accountability.”

Consider creating guidelines for what each department or team can do this year. That way, you can involve your executive team in the planning process, which helps ensure team cohesion and clarity across the organization.

“A good year in planning is when the business leaders feel ownership of the operational drivers required to hit the budget,” says Kate. “If I do not hear the words ‘finance plan,’ I know it’s been a good year.”

If you focus on priorities that are appropriate for your stage, then remember to 1) think big-picture and long-term, 2) outline key milestones, 3) take stock of your resources, 4) think through contingencies, 5) select metrics, and 6) keep an eye on comparables, you’ll have a strategic guide to navigate startup chaos.

And while plans typically start on January 1, remember to stay flexible. The best companies are always forecasting, reviewing, and recalibrating as they gain mastery over their business.

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Financial Projections for Startups and Small Businesses

Rami Ali

What’s on the horizon for your business? Will you need to hire new employees? Invest in new capital expenditures? Or maybe even consider opening a new location? Financial projections provide insight for small businesses and startups to plan for the future, as well as data and information potential lenders and investors need to understand your business.

What Are Financial Projections?

A financial projection is what your business expects to happen, based off hypothetical situations using the facts and data you have available. A financial projection is often prepared to present a course of action for evaluation. It’s a type of pro forma statement. Some examples of pro forma financial statements include projected income statements, balance sheets and cash flow statements.

Projections are based on financial modeling techniques and provide the answers to questions that may come from lenders, investors or other business stakeholders. Essentially, these statements are an answer to the questions, “If we lend you this money, what will you do with it? And how will you pay it back?”

Why Are Financial Projections So Important for Startups and Small Businesses?

Financial projections help you see when you may have financing needs and the best times to make capital expenditures. They help you monitor cash flow, change pricing or alter production plans.

Projections provide all the minutia that lenders might be looking for to better understand your business: how it obtains revenue and where it spends money. Additionally, if your business is ever the target of an acquisition, the financial statements help potential buyers evaluate its worth.

There are subtle differences between the terms projection and forecast. But both describe predictions of future financial performance using financial models. A financial forecast presents predicted outcomes based on the conditions you expect to exist for your business. Projections are financial statements that present an expected financial position given one or more hypothetical assumptions.

For example, Linda’s Linens is growing its sales volume 10% each year, and that growth has been steady for the last 18 months. After examining the financial forecast, it’s reasonable for Linda to assume that growth will continue, and she should plan accordingly. This helps her with inventory planning, hiring decisions and how much to allocate for marketing.

Linda is considering opening a second location. So she prepares a financial projection to show her bank a “what if” scenario to see how much growth she might expect if she received a loan to open another store on the other side of town. The hypothetical situation of opening a new location in the financial projection is what makes it different from the sustained growth she might reasonably suspect in the financial forecast.

What Are Financial Projections Used For?

Financial projections help you realize possible potential in your business. What might happen if you receive outside funding? Or purchase additional equipment? This is where you get to be creative and explore what the future of your business might look like.

Business Plan: Financial projections and business plans go hand-in-hand. It’s a way to show that your company is stable and is financially successful. It’s a good practice to provide quarterly or monthly projections for the first year and annual projections for the four years after that. These include projected income statements, balance sheets, cash flow statements and budgets for capital expenditures. You should be able to explain projections and match them to funding.

Investors: Your potential investors want to know if the business will make money and when they can expect a return on their investment. Some common benchmarks to watch for include how long it will take until the company turns a profit, sales in years three and five, and data showing how your numbers fit in context of your industry.

Loans and Lines of Credit: These are the most common sources of external funding for small businesses. To secure a Small Business Association (SBA) loan, you’ll need a thorough understanding of your finances so you can show the lender how your funds will be used and when the loan will be paid back.

Know your Business: Financial projections show discipline in financial management – and better financial management leads to a much higher chance of business success. By using a financial model to make financial projections, you can see if, when and whether your business will make a profit. You’ll have a better understanding of your cash position to make better decisions about when to hire more people, buy more inventory or make capital investments.

7 Steps to Building a Financial Projection for Your Startup or Small Business

Some common scenarios for projections are monthly projections for year one, quarterly for the next two years and annual thereafter. To build out your financial projections and make them as useful as possible, consider including the following:

  • Sales revenue estimates
  • Cost of sales or cost of goods sold (COGs)
  • Operating costs
  • Capital expenditures
  • Gross margin by product line
  • Sales increase by product line
  • Interest rates on debts
  • Income tax rate
  • Accounts receivable collection plan
  • Accounts payable schedule
  • Inventory turnover
  • Depreciation schedules
  • The usefulness or depreciation of assets

Financial projections will usually have a detailed view in a spreadsheet, as well as a summary of some of the most important information. To create this, your business will need a financial model, or a summary of your company’s expenses and earnings. Some of the basic areas to start building financial projections include:

  • Create a sales forecast.

What’s driving your sales? That’s where you should start with your projections. For example, if you have a subscription-based web business, correlate sales with estimated website traffic, and conversion rates with the source of traffic. Like a project management platform that sees 1.5% of its traffic from organic Google searches turn into paying customers. The same project management company should also identify conversion rates for customers who land on the site from ads. That way they can estimate how many new customers an increased ad spend or increased organic searches might attract. And finally, the platform should track their churn rate, or how many customers don’t renew their subscription.

For a business that sells physical products, the sales forecast should estimate the number of units it will sell and the price per unit. It’s also helpful to see where and how the items are being sold: How many stores are carrying the products? How are each of those stores performing? The company should factor in things that might affect sales like seasonality. For example, more ice cream and sunscreen are sold in the summer. Is there a seasonality to your product?

  • Create an expense budget.

Expenses will include the costs associated with sales, as well as operating expenses. To forecast cost of sales or cost of goods sold (COGS), take all of the current information on the income statement about product cost, fulfillment expense, customer service and merchant fees. Express assumptions about how that will change as a percentage of revenue. Apply the same idea to operating expenses. Consider how headcount, salaries and benefits as well as expenses like advertising, rent and more will change and express everything (with the exception of headcount) as a percentage.

  • Create the income statement projection.

Link those assumptions to formulas built in the income statement. The financial model will forecast revenue, net revenue, COGS, gross profit, gross margin, operating expense, operating profit and operating margin. The output of the financial model is the projected income statement.

  • Create the cash flow projection.

The projected income statement shows you, as well as potential lenders and investors, if the company is profitable and/or when it is expected to make a profit. The cash flow projection shows your cash position and provides a more detailed view of monthly inflows and outflows of cash for a specific period of time — 3 months, 6 months, 12 months, etc.

  • Create the balance sheet projection.

Where the cash flow projection lets you see when there should be cash influxes and dips, the balance sheet shows or projects the worth of your company at any given time. Cash flow projections appear on your balance sheet as assets. On the liabilities side of the balance sheet, you’ll list things like accounts payable and debt.

  • Use projections for planning.

Projections are important when seeking new funding. And they help you know when to make capital expenditures. For planning, projections help with analyzing the impact of different business strategies. For example, what if you charge a higher or lower price? What if you’re able to collect invoices faster? Running and testing these various numbers shows how such decisions could affect finances.

Projected financial statements also help you prepare for best and worst case scenarios. You can use projected financial statements to drill down to the product level and know when it will be profitable, when to ramp up production or even when it no longer makes business sense to continue producing it.

By comparing projections against actual results you can see if you’re on target or need to adjust to reach them. Consider purchasing accounting and planning software for financial projections . Tracking performance is much easier and quicker with dashboards and charts that can show you at-a-glance information.

Plan & Forecast More Accurately

Benefits of Using Accounting and Planning Software for Financial Projections

There are advantages to automating financial modeling. You can handle more complex datasets and certain visualization capabilities, as well as streamline financial projections.

  • All lines of businesses are connected to the same data, improving control, visibility and trust in the numbers.
  • Drill-through capability means you can spend more time drilling into the data to understand the source of the numbers. Finance then has more time to understand the "why" and can better help the business owners understand how their decisions affect the rest of the company.
  • You can easily run what-if-scenario analysis to explore different business opportunities.
  • Pre-built reports and dashboards make it easy to compare projected vs. actual results.

Automation can increase accuracy save time, and help you compare actual and forecasted results in charts and dashboards. With so much potential, automation is a growing trend. In fact, a survey by Robert Half, a global human resources consulting firm, found that nearly one quarter of respondents expect to automate processes behind financial forecasting.

But even if the analytics associated with financial projection aren’t automated, using technology to automate other parts of the accounting process that go into building the static financial statements provide savings in terms of speed and accuracy.

To run a business, you need to know not just where you are financially, but where you want to be. There is a correlation between how frequently small businesses examine their financial statements and the financial health of their business. The U.S. Small Business Administration found businesses that only look at financial statements annually have a 25% success rate. But those that do it monthly have a success rate of 75%-85%, and those that do it weekly have a 95% success rate. It takes more than just a good idea and dedication to make your business succeed. And accounting software for financial planning is an important tool to keep your company on track to prosperity.

Financial Management

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Small Business Financial Management: Tips, Importance and Challenges

It is remarkably difficult to start a small business. Only about half stay open for five years, and only a third make it to the 10-year mark. That’s why it’s vital to make every effort to succeed. And one of the most fundamental…

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Free Startup Business Plan Templates and Examples

By Joe Weller | May 6, 2020

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In this article, we’ve rounded up a variety of the top, professionally designed startup business plan templates, all of which are free to download in PDF, Word, and Excel formats.

Included on this page, you’ll find a one-page startup business plan template , a business plan outline template for startups , a startup business planning template with a timeline , and a sample startup business plan .

Startup Business Plan Template

financial business plan for startup

Download Startup Business Plan Template - Word

Word | Smartsheet

This startup business plan template contains the essential components you need to convey your business idea and strategy to investors and stakeholders, but you can customize this template to fit your needs. The template provides room to include an executive summary, a financial overview, a marketing strategy, details on product or service offerings, and more.

One-Page Startup Business Plan Template

One Page Business Plan For Start Up Template

Download One-Page Startup Business Plan Template

Excel | Word | PDF

This one-page business plan is ideal for startup companies that want to document and organize key business concepts. The template offers an easy-to-scan layout that’s ideal for investors and stakeholders. Use this plan to create a high-level view of your business idea and as a reference as you flesh out a more detailed roadmap for your business.

For additional resources, visit " Free One-Page Business Plan Templates with a Quick How-To Guide ."

Simple Fill-In-the-Blank Business Plan Template for Startups

Simple Fill In The Blank Business Plan Template

Download Simple Fill-in-the-Blank Business Plan Template for Startups

This comprehensive fill-in-the-blank business plan template is designed to guide entrepreneurs through the process of building a startup business plan. This template comes with a customizable cover page and table of contents, and each section includes sample content that you can modify to fit the needs of your business. For more fill-in business templates, read our  "Free Fill-In-the-Blank Business Plan Templates"  article.

Lean Business Plan Template for Startups

Lean Business Plan Templates for Startups

Download Lean Business Plan Template for Startups

This Lean business plan template takes a traditional business plan outline and extracts the most essential elements. Use this template to outline your company and industry overview, convey the problem you are solving, identify customer segments, highlight key performance metrics, and list a timeline of key activities.

Business Plan Outline Template for Startups

Simple Business Plan Outline Template

Download Business Plan Outline Template for Startups

You can use this business plan outline as a basis to create your own business plan. This template contains all the elements of a traditional business plan, including a title page, a table of contents, and information on what to include in each section. Simplify or expand this outline based on the size and needs of your startup business.

Startup Business Planning Template with Timeline

Simple Business Planning Template with Timeline

Download Startup Business Planning Template with Timeline

Excel | Smartsheet

As you create your business plan, this business planning template doubles as a schedule and timeline to track the progress of key activities. This template enables you to break down your plan into phases and provides space to include key tasks and dates for each task. For a visual timeline, shade in the cells according to each task’s start and end dates. The timeline ensures that your plan stays on track.

Business Plan Rubric Template for Startups

financial business plan for startup

Download Business Plan Rubric Template for Startups

Excel | Word | PDF | Smartsheet

If you’re starting a business and want to keep all your ducks in a row, use this rubric to evaluate and score each aspect of your startup business plan. You can tailor this template to the needs of your specific business, and can also highlight areas of your plan that require improvement or expansion. Use this template as a tool to make sure your plan is clear, articulate, and organized. A sharp, insightful, well thought-out plan will definitely get the attention of potential investors and partners.

For additional resources to help support your business planning efforts, check out “Free Startup Plan, Budget, and Cost Templates.”

What’s the Best Business Plan Template for Startups?

The template you choose for your startup business depends on a number of factors, including the size and specific needs of your company. Moreover, as your business grows and your objectives change, you will need to adjust your plan (and possibly your choice of template) accordingly. 

Some entrepreneurs find it useful to use a Lean business plan template design in order to jot down a business concept and see if it’s feasible before pursuing it further. Typically one to three pages, a Lean business plan template encourages you to highlight core ideas and strategic activities and remain focused on key points.

Other entrepreneurs prefer a template with a more traditional business plan design, which allows you to go into greater detail and ensure you include every detail. A traditional plan can range from 10 to 100 pages and cover both the high-level and granular particulars of your overall concept, objectives, and strategy.

There is no one-size-fits-all solution, but the following section outlines the minimum that your business plan template should include in order to gain buy-in from potential investors.

What to Include in a Startup Business Plan

Whether you choose to use a template to develop your startup business plan or decide to write one from scratch, you need to include the following elements:

  • An overview of your company and the industry in which it operates
  • The problem you are solving and the proposed solution
  • A description of your product or service offerings, including key features
  • The existing alternatives that customers use and your competitive advantage
  • The target customer segments and the channels you will use to reach them
  • The cost structure and revenue streams associated with your business
  • A financial plan, including sales and revenue projections (ideally 3-5 years)
  • If applicable, the financial requirements to get your business running, including how you will source and allocate funds

Each of the following sections provides an example of a business plan that you can use for reference as you develop your own.

One-Page Lean Business Plan Example

This Lean business plan example displays a visually appealing and scannable one-page illustration of a business plan. It conveys the key strategies you need to meet your main objectives. Each element of this concise plan provides stakeholders and potential investors with links to resources that support and expand upon the plan’s details, and it can also serve as an investor pitch deck.

One Page Business Plan Example

Startup Business Plan Sample

This business plan sample contains all the aspects of a standard business plan. Using a fictional food truck business as the basis for a startup business plan, this sample will give you all the ideas you need to make your plan outstanding.

Basic Business Plan Sample

Download Startup Business Plan Sample - PDF

When the time comes that you need more space to lay out your goals and strategies, choose from our variety of  free simple business plan templates . You can learn how to write a successful simple business plan  here . 

Visit this  free non-profit business plan template roundup  or of you are looking for a business plan template by file type, visit our pages dedicated specifically to  Microsoft Excel ,  Microsoft Word , and  Adobe PDF  business plan templates. Read our articles offering  free 30-60-90-day business plan templates  to find more tailored options.

Top 10 Tips to Create a Startup Business Plan

Putting together a business plan can be overwhelming and time consuming, especially if you aren’t sure where to begin. Below, we share tips you can use to help simplify the process of developing a startup business plan of your own. 

  • Use a business plan template, or begin with a business plan outline that provides all the elements of a standard plan to get your ideas down on paper in a structured manner. (You can choose from the selection of templates above.)  
  • Remove sections from your outline that aren’t relevant or that aren’t necessary to launch and operate your business.
  • Compile the data you have gathered on your business and industry, including research on your target market and product or service offerings, details on the competitive landscape, and a financial plan that anticipates the next three to five years. Use that information to fill in the sections of your plan outline. 
  • Get input and feedback from team members (e.g., finance, marketing, sales) and subject matter experts to ensure that the information you’ve included in the plan is accurate.
  • Make certain that the objectives of your plan align with marketing, sales, and financial goals to ensure that all team members are moving in the same direction.
  • Although this section of the plan comes first, write the executive summary last to provide an overview of the key points in your business plan.
  • Prepare a pitch deck for potential clients, partners, or investors with whom you plan to meet in order to share vital information about your business, including what sets you apart and the direction you are headed. 
  • Who are the founders and management executives, and what relevant experience do they bring to the table?
  • What is the problem you are solving, and how is your solution better than what currently exists? 
  • What’s the size of the market, and how much market share do you plan to capture?
  • What are the trends in your market, and how are you applying them to your business?
  • Who are your direct competitors, and what is your competitive advantage?
  • What are the key features of your product or service that set it apart from alternative offerings, and what features do you plan to add in the future?
  • What are the potential risks associated with your business, and how do you plan to address them?
  • How much money do you need to get your business running, and how do you plan to source it?
  • With the money you source, how do you plan to use it to scale your business?
  • What are the key performance metrics associated with your business, and how will you know when you’re successful?
  • Revisit and modify your plan on a regular basis as your goals and strategies evolve.
  • Use a work collaboration tool that keeps key information across teams in one place, allows you to track plan progress, and captures updates in real time.

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Do you want to increase the odds that your business startup will be a success? Download this step-by-step business plan template to lay the groundwork for your new business.

Writing a business plan allows you to carefully think through every step of starting your company so you can better prepare and handle any challenges. While a thorough business plan is essential in the financing process, it's helpful even if you don’t need outside financing.

Creating a business plan can:

  • Help you discover any weaknesses in your business idea so you can address them before you open for business
  • Identify business opportunities you may not have considered and plan how to take advantage of them
  • Analyze the market and competition to strengthen your idea
  • Give you a chance to plan strategies for dealing with potential challenges so they don’t derail your startup
  • Convince potential partners, customers, and key employees that you’re serious about your idea and persuade them to work with you
  • Force you to calculate when your business will make a profit and how much money you need to reach that point so that you can be prepared with adequate startup capital
  • Determine your target market and how to reach them

A detailed, step-by-step plan gives you a blueprint you can refer to during the startup process and helps you maintain momentum.

What this business plan template includes

Writing a business plan for a startup can sometimes seem overwhelming. To make the process easier and more manageable, this template will guide you step-by-step. The template includes easy-to-follow instructions for completing each business plan section, questions to help you think through each aspect, and corresponding fillable worksheet/s for critical sections.

After you complete the 11 worksheets, you will have a working business plan for your startup to show your SCORE mentor .

Business plan sections covered in this template:

  • Executive Summary
  • Company Description
  • Products and Services
  • Marketing Plan
  • Operational Plan
  • Management and Organization
  • Startup Expenses and Capitalization
  • Financial Plan

The Appendices include documents that supplement information in the body of the plan.  These might be contracts, leases, purchase orders, intellectual property, key managers’ resumes, market research data or anything that supports assumptions or statements made in the plan.

The last section of the template, “Refining Your Plan,” explains ways to modify your plan for specific purposes, such as getting a bank loan, or for specific industries, such as retail or manufacturing.

Complete the Business Plan Template for a Startup Business to create a working business plan for your startup.

Then, contact a  SCORE mentor  to review and refine your plan online or in person.

Quick Start Business Plan The aim of this module is to give you the tools, direction and ideas you need to build a business plan. If you're starting a business then a business plan is essential, because it forces you to think through your ideas and options.

10 Business Planning Tips for Starting a Business In this webinar, you'll learn 10 business planning tips to help you start your entrepreneurial journey on the right path.

Business Plan 101: Sales & Marketing The sales and marketing section of your business plan describes how you intend to sell your product. Learn what you should include in this section.

Copyright © 2023 SCORE Association, SCORE.org

Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

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JUST RELEASED: View the 2024 Franchise 500 Ranking

How To Choose the Right Funding Model for Your Startup Choosing the right funding model for your startup is a pivotal decision that requires careful consideration.

By Kimberly Zhang • Feb 20, 2024

Key Takeaways

  • Whichever method you opt for, aligning the funding model with your startup’s stage, industry financial needs is essential.

This story originally appeared on Under30CEO

Choosing the right funding approach is a critical decision for launching your startup that can shape the trajectory of your business.

In this article, we will explore various funding models available to startups and provide insights on how to make informed decisions based on your unique needs and goals.

Understanding Types of Startup Funding Models

Bootstrapping.

Bootstrapping involves funding your startup with personal savings, revenue generated by the business, or loans from friends and family. While it offers autonomy and control, it comes with the challenge of limited resources and a potentially slower growth trajectory.

Angel Investors

Angel investors are affluent individuals who provide capital for startups in exchange for ownership equity or convertible debt. This funding model not only brings in financial support but often includes mentorship and industry connections.

Related: 12 Things You Need to Understand about the Silicon Valley Model before Using it in Other Markets

Using Security

Some entrepreneurs use security as a means of funding. This can come in multiple forms, including using your property, inventory or other assets as collateral, which can be risky if you cannot repay the finance. Other options include using accounts receivable (or invoice factoring), such as future orders, and borrowing money against these future orders.

Venture Capital

Venture capital firms invest larger amounts of money in startups with high growth potential. Venture capital funding is suitable for businesses with scalability, a strong market opportunity, and a capable team. However, it involves giving up a portion of equity and adhering to rigorous growth expectations.

Crowdfunding

Crowdfunding platforms like Kickstarter and Indiegogo allow startups to present their ideas to a global audience and collect small contributions from backers.

Kickstarter alone has facilitated over 500,000 projects, raising more than $6 billion from 18.6 million backers, showcasing the impact of crowdfunding on startup funding.

This model not only provides capital but also serves as a marketing tool, generating buzz and interest around the startup.

Related: 12 Key Strategies to a Successful Crowdfunding Campaign

Bank Loans and Traditional Lending

Historically, if you need a loan, you would visit your local bank branch and speak to a bank manager. This has changed significantly over the last few decades towards more private institutions which may offer more favourable terms and faster funding.

Through the likes of Funding Circle, MT Finance, Iwoca and Swoop, new businesses are able to access capital much quicker and raise significant amounts, even as much as £500,000 or £1 million. However, note that you may need to be trading for a minimum period of time, e.g., 6 months or 2 years, and have regular revenue.

Factors to Consider When Choosing a Funding Model

  • Stage of Your Startup: The stage of your startup plays a crucial role in determining the most suitable funding model. Bootstrapping might be ideal for early-stage ventures, while later stages may benefit from venture capital to fuel rapid growth.
  • Business Model and Industry: The nature of your business and industry can influence the choice of funding. Some high-growth industries may be more attractive to venture capitalists, such as biotechnology, while other new businesses, such as in consumer goods, may find success through crowdfunding or angel investment.
  • Financial Need: Evaluate the specific financial needs of your startup. Consider factors such as initial capital requirements, operating expenses, and potential expansion plans. This assessment will guide you toward a funding model that aligns with your financial goals.
  • Risk Tolerance: Assess your risk tolerance as an entrepreneur. While venture capital might bring substantial funding, it also involves relinquishing control and adhering to aggressive growth targets. Bootstrapping, on the other hand, offers autonomy but requires a higher risk tolerance due to limited resources.
  • Timeframe for Results: Consider the timeframe within which you expect to see results. Venture capital may provide rapid injections of capital for quick scaling, while crowdfunding campaigns might take time to build momentum. Bootstrapping offers a gradual approach but may result in slower growth.

How To Choose The Right Funding Option For Your Startup

Thoroughly research each funding model, understanding its advantages, challenges, and success stories within your industry. Networking becomes incredibly important, so take time to consult with industry experts, mentors or advisors who have experience in your field. Their insights can provide valuable perspectives on the most suitable funding model for your startup.

Also consider a diversified approach by combining multiple funding sources. For instance, a mix of angel investment, crowdfunding and bootstrapping might provide a well-rounded and resilient financial foundation.

Choosing the right funding model for your startup is a pivotal decision that requires careful consideration of various factors. Whichever method you opt for, aligning the funding model with your startup's stage, industry financial needs is essential.

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How Fast Should Your Company Really Grow?

  • Gary P. Pisano

financial business plan for startup

Growth—in revenues and profits—is the yardstick by which the competitive fitness and health of organizations is measured. Consistent profitable growth is thus a near universal goal for leaders—and an elusive one.

To achieve that goal, companies need a growth strategy that encompasses three related sets of decisions: how fast to grow, where to seek new sources of demand, and how to develop the financial, human, and organizational capabilities needed to grow. This article offers a framework for examining the critical interdependencies of those decisions in the context of a company’s overall business strategy, its capabilities and culture, and external market dynamics.

Why leaders should take a strategic perspective

Idea in Brief

The problem.

Sustained profitable growth is a nearly universal corporate goal, but it is an elusive one. Empirical research suggests that when inflation is taken into account, most companies barely grow at all.

While external factors play a role, most companies’ growth problems are self-inflicted: Too many firms approach growth in a highly reactive, opportunistic manner.

The Solution

To grow profitably over the long term, companies need a strategy that addresses three key decisions: how fast to grow (rate of growth); where to seek new sources of demand (direction of growth); and how to amass the resources needed to grow (method of growth).

Perhaps no issue attracts more senior leadership attention than growth does. And for good reason. Growth—in revenues and profits—is the yardstick by which we tend to measure the competitive fitness and health of companies and determine the quality and compensation of its management. Analysts, investors, and boards pepper CEOs about growth prospects to get insight into stock prices. Employees are attracted to faster-growing companies because they offer better opportunities for advancement, higher pay, and greater job security. Suppliers prefer faster-growing customers because working with them improves their own growth prospects. Given the choice, most companies and their stakeholders would choose faster growth over slower growth.

Five elements can move you beyond episodic success.

  • Gary P. Pisano is the Harry E. Figgie Jr. Professor of Business Administration at Harvard Business School and the author of Creative Construction: The DNA of Sustained Innovation (PublicAffairs, 2019).

Partner Center

I'm a financial planner — I have 4 tips for my business owner clients looking to open a business bank account

Our experts choose the best products and services to help make smart decisions with your money ( here's how ). In some cases, we receive a commission from our partners ; however, our opinions are our own. Terms apply to offers listed on this page.

  • Legally protecting yourself in case of an audit is the No. 1 reason to use a business bank account.
  • Different banks will offer different levels of convenience, and they'll come with different fees.
  • Fraud detection and other security features are especially important for protecting your business.

Insider Today

When starting a business, it can be overwhelming thinking about all the things you need to do and consider. However, it is essential that you do not overlook the value of opening a business bank account — usually both a business checking account and a high-yield business savings account .

As a CPA and financial planner, one of the first things I tell all my business owner clients to do is to keep their personal and business transactions separate. While there are a multitude of reasons you should have a separate bank account for your business, legal protection is certainly the most important.

If you experience an audit, it is important to have an easy way to track your business expenses and income. When business finances are commingled with personal finances, it becomes nearly impossible to provide a clear financial trail.

When choosing a business bank account, there are several important factors to consider. Here are four things I tell my business owner clients to consider when choosing a business bank account.

1. Access to banking services and customer service

When it comes to running a business, a variety of banking services can help you effectively manage your business finances. Beyond just opening a business bank account, you want to ensure that the financial institution you choose can provide access to services such as a checking account, savings account, business loans , wire transfers, fraud prevention services, a notary, checkbooks, business credit cards , online and mobile banking, and bill payment services.

If you want more one-on-one attention from a banker, consider opening an account with your local bank or credit union. You may also prefer a physical branch if you plan to make daily deposits or withdrawals of cash or checks.

This may be more challenging to do with an online bank. Many online banks may offer deposits and withdrawals, but their ATM network may not be as large as a well-known brick-and-mortar bank. For this reason, some small business owners open an account at their local bank where they have their personal accounts and know the level of customer service they will receive.

Consider opening your business checking and savings accounts at different financial institutions so that you can have access to both better banking services at a physical branch and higher interest rates at an online bank.

2. Terms and fees (including minimum balance)

The fees associated with business bank accounts can vary widely depending on the financial institution. Some of the most common fees to be aware of include monthly maintenance fees, overdraft fees , wire transfer fees, minimum balance fees, and ATM fees.

You may find that online banks charge fewer fees than brick-and-mortar banks, but you must consider this in conjunction with the other features.

Seek an account with reasonable fees that can accommodate your business.

3. Ease of paying contractors

Some business bank accounts, especially online accounts, offer free invoicing and bookkeeping software/features.

If you use accounting software (such as QuickBooks) to manage your business finances, accessing a business bank account that offers integration features may be desirable. Trust me, this will make your or your accountant's life much easier.

In addition, some accounts allow integrations with payroll and tax preparation software. This will help to make the process of paying contractors with 1099s more seamless.

4. The bank's security offerings

One of the most important things you should consider when choosing a business bank account is security. There are certain features that you want to look for to make sure your account is protected.

First, you want to make sure that the bank you choose is FDIC-insured (or NCUA-insured if a credit union). In addition, you want to make sure that the institution has additional layers of security such as multi-factor authentication and fraud detection services, which include account monitoring and alerts for suspicious activity.

Ensure that whatever bank you choose offers the best security features to protect your business from fraud.

When choosing a bank account, consider all the various banking features offered by different financial institutions to find the one that best suits your business's financial needs. Also, remember that your decision is not permanent. It is easy to switch banks if necessary.

Watch: The 3 most important things you need to know about starting a business

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  10. Guide to Writing a Financial Plan for a Business

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  11. Startup Financial Planning: 14 Tips for Founders

    Financial planning is the process of putting your "game plan" together and documenting it. Using data, you make assumptions about revenue, expenses, and other financial parts of your business to forecast the financial trajectory of your business. A lot of startups document their plan in a spreadsheet, but we prefer software .

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  13. Startup Business Plans 101: Your Path to Success

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  14. Startup financial models

    Here is the methodology I used to build this benchmark. I compared 40 points across 5 categories: (a) financial statements, (b) analysis capabilities, (c) revenue modeling, (d) cost modeling, (e) extra features. A detailed analysis of each model is available below. In each case, I tested the software/spreadsheet myself.

  15. 4 Key Financial Statements For Your Startup Business Plan

    That's absolutely normal: any startup business plan should at least include forecasts of the 3 financial statements. The financial projections need to be presented clearly with charts and tables so potential investors understand where you are going, and how much money you need to get there.

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    Whether the business is starting from scratch or modifying its plan, the best financial plans include the following elements: Income statement: The income statement reports the business's net profit or loss over a specific period of time, such a month, quarter or year.

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    First, work on your startup budget and your startup costs worksheet. You'll need to do a lot of estimating. Note The trick is to underestimate income and overestimate expenses, so you can create a more realistic picture of your business over the first year or two. Then work on a profit and loss statement for the first year.

  18. How to Write a Financial Plan for Startups [Framework]

    4. Think Through Contingencies. Once you've outlined your plan, strengthen it by thinking through contingencies. "It's sometimes easy to rationalize why you've missed your target and accept a miss," says James. "But if you can unemotionally recalibrate through contingency planning, you'll make smart decisions.".

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  20. Free Startup Business Plan Templates

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