YOUR FINANCIAL PROJECTION: A ROADMAP TO SUCCESS
An essential part of any business plan includes the financial information to support your dream. If a good business plan is your roadmap, then getting a real picture of your true financial needs with a 12-month financial projection template will help that roadmap lead to success.
WHAT IS A 12- MONTH FINANCIAL PROJECTION TEMPLATE?
Excel documents offer a great way for entrepreneurs to track financial projections because they provide a format that makes it easy to assemble the internal and external accounting data you use every day to manage your business. If your template is already set up with the proper calculations, you will just need to add the necessary data to review your financial forecast.
This type of template often requires you to add sales revenue, cost of goods sold, cash flow for equipment, inventory and operating expenses, such as insurance, bank fees, rent, payroll, supplies, telephone, utilities, and more. While there are myriad financial projection templates available, CDC Small Business Finance offers a template specific to supporting you as you apply for a small business loan.
WHY DO I NEED TO PREPARE A FINANCIAL PROJECTION FOR MY BUSINESS?
Many entrepreneurs find that maintaining financial projections throughout the year is one of the most important keys to success. It can take some time and effort, but it will be worth every minute. Why?
- It helps you take stock of your business performance with real data.
- If done consistently, you will know quickly if you need to course correct.
- It reveals your company strengths, as well as any weaknesses so you can address them in a timely way.
- It clarifies what milestones or tasks to prioritize.
- It provides a vital feedback loop so that you can plan for any financial impact caused by changes at your business.
- It helps with staff planning and allocation.
- Most important, it provides a clear picture of your cash-flow.
OUR TEMPLATE IS DIFFERENT … AND IT’S FREE
As a mission driven, non-profit organization, CDC Small Business Finance offers a variety of products and services to meet the financing needs of small-business owners. Among these are a plethora of planning resources, including our 12-Month Financial Projections Template.
“There are many projection templates out there and ours is very specific to getting a loan,” said Susan Lamping, Vice President of Sales at CDC Small Business Finance. “If you’re starting or expanding your business and you need a loan, any reputable lender will need this information.
“A lender will always require that you put a projection together and our template ensures that you don’t cut corners,” Lamping said. “It takes into account all start-up costs, plus fixed costs and your projected loan amount, so you’re really looking at a comprehensive view of the cash flow of your business. Nothing is left out. Everything is included.”
READY TO GET STARTED WITH CDC’s PROJECTION TEMPLATEGet Your 12-Month Financial Projection Template Here
The projection template includes three worksheets that you need to complete:
- General Info: loan amount requested, interest rate, term and cash on hand
- Projected Cash Flow Year 1: your business’ financial information including sales, cost of goods sold, operating expenses and cash flow
- Amortization: requested loan’s amortization schedule, a table showing the amount of principal and interest that comprise each loan payment through the end of the loan term
The Projected Cash Flow worksheet is the one that demands the most focus. Although it may take some time initially, it is well worth the effort. While working through the various fields – which include operating expenses as well as start-up costs – the worksheet will begin to auto-populate with a year’s worth of financial information.
Nonrecurring expenses – promotional material for example – will refrain from showing up as a recurring cost while monthly rent, for example, will repeat 12 times in a year. And start-up costs automatically flow into the “expense” section, whether recurring or not. When the work is complete, you’ll know at a glance whether you’ll have an annual profit or a loss.
“If the result is negative, you might want to pause and rethink things,” Lamping said. “It doesn’t always mean your business won’t work – it may be a business that makes a profit in year two or three – and if so you’ll need to do a second or third year projection plan as well.”
LOANS FOR EVERY SMALL BUSINESS NEED
Once you’ve done the work and can see a positive outcome, CDC offers several loan products to help start or expand a business. Our loans can help secure capital from $10,000 to $500,000, with loan repayment terms that range from three years to more than 10, depending on the loan type and amount. Most importantly, CDC works with you to understand your business and match you with the loan that will best support your goals and be sustainable for your business.
DO YOU ADVISE ENTREPRENEURS? IF SO THIS TOOL IS A GREAT RESOURCE FOR YOUR CLIENTS
While the 12-Month Financial Projections Template can show entrepreneurs how to achieve their dreams, it has proven equally helpful to the individuals and institutions that counsel small-business owners. Lamping said business coaches often share it with their small-business owner clients.
“Bankers can give it to their customers and we’ve found it really comes in handy for the business counselors we work with at the Small Business Development Center as well as SCORE,” Lamping said. “We offer training and we’re happy to do this so counselors are really up to speed to help the client put the best projections together to get them loan ready. It really meets the need for anyone who is applying for a loan.”
Click below for CDC’s Forms and Templates hub. For the 12-Month Financial Projections Template, scroll down to Helpful Business Templates.Find Your 12-Month Financial Projection Template Here
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