Your P&L statement should take the information from your sales projections, expenses budget, and cash flow statement to project how much you expect in profits or losses through the three years included in your business plan.
You should have a figure for each individual year as well as a figure for the full three-year period.
Creating financial projections for your startup is both an art and a science.
Although investors want to see cold, hard numbers, it can be difficult to predict your financial performance three years down the road, especially if you are still raising seed money.
Be sure to follow the generally accepted accounting principles (GAAP) set forth by the Financial Accounting Standards Board, a private-sector organization responsible for setting financial accounting and reporting standards in the U. If financial reporting is new territory for you, have an accountant review your projections.
As a startup business, you do not have past results to review, which can make forecasting sales difficult.For example, certain expenses will be the same or close to the same every month, including rent, insurance, and others.Some costs likely will vary month by month such as advertising or seasonal sales help.In practical terms, your forecast should be broken down by monthly sales with entries showing which units are being sold, their price points, and how many you expect to sell.When getting into the second year of your business plan and beyond, it's acceptable to reduce the forecast to quarterly sales.These include the cost to your business of the units being sold in addition to overhead.It's a good idea to break down your expenses by fixed costs and variable costs.As with your sales forecast, cash flow statements for a startup require doing some homework since you do not have historical data to use as a reference.This statement, in short, breaks down how much cash is coming into your business on a monthly basis vs. By using your sales forecasts and your expenses budget, you can estimate your cash flow intelligently.Business plan financials workbook with auto-populated sheets and print read documents for easily adding to your business plan.Create multiple financials and use for your customers or next business idea.