This spreadsheet is for a business venture to analyze their projected income. It is essential for a business starting out to utilize this in some way, shape or form. Without this information, you may as well be looking for who knows what in a haystack.
Using this Financial Projections worksheet one can assess their business model with some solid numbers. This spreadsheet should be constantly modified and tweaked when customers are interviewed, market segment is identified, market surveys are completed, first year sales numbers are in, etc.
The Download
Download Financial Projections Worksheet here.
Financial Projections Explained
note: it is important to go through the worksheet in the order I will explain it here. Many fields auto-populate from the sheet before. Generally the gray cell boxes are the ones to fill in (except on the first sheet for Products and Services) and white boxes automatically calculate based on input in another box.
Products & Services
In orange are the columns to fill in with your ventures products: Products or Service, Sale Price per Unit or Billed Rate per Hour, Cost of Goods. Blue columns will automatically calculate.
It is not necessary to fill in all the spots on the sheet. In fact, some will say it’s better to have fewer products at the start of your venture’s life.
Product of Service is the name you’re giving to what you’re offering (ie. bike, belt, bottle, etc.). Sale Price per Unit is how much you sell the unit or service for (ie. $15.00 before taxes). Cost of Goods is how much it costs you to make the item (ie. the parts, the labour, the shipping, etc.).
Sales Forcasts
Once Products & Services have been filled out, Column B will automatically populate in the Sales Forcasts sheet. Also the orange bar with the item name will be changed. This sheet is for you to take an educated guess at how many of your items you plan on selling, which is filled into the number of units sold row for each item.
Total income each month for each item will be calculated, as well as total for all items and a yearly total at the bottom of the sheet.
This sheet can be hard to fill in because it requires some guess work. How do you know how many sales you expect if you haven’t made a sale?! It’s ok to start off slow, and ramp your sales up to ideal goals towards the end. A lot of companies don’t start making a profit until year three. Some tips to help a ventures accurate sales forcasts are to do potential customer surveys. Interview your ideal customer and see how frequently they buy your products, or can see themselves buying your products given your price point (tip: some university students are really looking for this work to do for their business classes). If you have more expensive products, it might be ideal to see if you can get some letters of intent from potential customers identifying if you make this many products, at this price, they’ll buy this many from you.
Sales Actuals
Much like the previous sheet, if you already have one year of sales, or are wanting to track to see if you’re on point for your projected sales, fill in this sheet.
Owners Projected Drawings
This is a quick analysis of how much you require yourself, for your personal life, to live. How much you require to stay alive as a human per month. How much it costs to be you.
If you need to add extra items feel free to do so, just make sure the formula adds up.
note: it is only necessary to fill in the gray boxes, the other ones will automatically calculate.
Cash Flow Projections
This sheet projects the cash flow of our company, the ins and outs of moneys for your venture.
The cash in section of the sheet will automatically populate based on the Sales Forcasts sheet we’ve previously filled in. Cash out column is where you focus your attention. This is all the expenditures of operating your company, on a month by month basis.
note: only fill in items in the gray boxes. the white boxes will automatically populate.
If you run down the left hand column, you will see a lot of items that most companies must pay out: rental, utilities, tools, wages, etc. It is alright to skip months, leave boxes blank, or leave whole rows blank. Depending on your venture, you will have different expenses. If you anticipate different expenses that your venture will have, it’s alright to change the item titles too.
Understanding the Results
Once all these fields are filled in (to the best of your knowledge) you can get an estimations of how successful your venture will be.
Pay particular attention to the bottom of the Cash Flow Projections sheet, where it has the total cash in and cash out, and subsequently closing balance cash. Closing Balance Cash means how much profit your company will make at the end of the day. More bigger, positive number you have here, the more lucrative your venture idea is.
It is important to note here that almost all the time the first run through of this Financial Projections document will not give you the results that you’re looking for. What it’s supposed to do is help you identify where your most profitable items are that you’re offering, and help you direct your attention towards these cash cows. The idea is to get more cash cows.
For example, if you have a widget that you estimate to sell 50 of in the first year, and you’re making a profit of $2 on each one, this means that you’ll be making $100 on the item. This tells us that you either need to charge more for the item, find out how to make them for cheaper, figure out how to sell more of them, or not depend on them to make you any kind of substantial income. If you’re also selling widget #2 for a $20,000 profit, and you plan on selling 3 of them in the first year, it would be smart to not even bother with selling the first widget, and try and sell more of the second widgets.
This also helps you identify who your target should be going forward, in spite who you really want to appeal to.
Finally, this is a free spreadsheet. You can chop it up as you wish and share it with your friends. When the new year comes I’ll update the download with the new sheets. I would greatly appreciate if you’d tell your friends where you got it from! Teition‘s the name.
Please don’t hesitate to contact me or comment with questions below. The more questions, the more powerful I can make this spreadsheet.
Hope this helps!