8 ways to optimize your business plan’s finanical Projections

SCOTT milleR, client accounting services director


You need a business plan for three primary reasons:

  • To show to bankers and potential investors
  • To better understand your existing business structure
  • To do short- and long-term strategic planning

Effective business plans contain multiple text documents, but it’s the financials—those charts and graphs and tables—that will jump out at potential loan approvers and investors. They’re also useful to you as you continuously assess your company’s financial growth.

Three reports are always included: Income Statement (Profit & Loss), Cash Flow Statement, and Balance Sheet. Some business plans offer additional ones, like a sales forecast and expense budget. These grow out of your assumptions, a lengthy list of questions you must answer, like:

  • How many units will you sell each month?
  • How much will you spend on marketing in the first 12 months?
  • What do you have currently in assets? Liabilities?

How can you make your projections realistic while displaying your company’s strength in the best possible light?  Here are some suggestions.

1. Start with historical data

Unless you’re just launching your business, you have existing data you can use for reference as you’re creating your projections. If you’re already using QuickBooks, this will be a lot easier.

2. Look at examples

If you’re a new company and don’t have historical data, this will be difficult, as privately-held small and midsized companies generally don’t disclose their financials. You can still do market and industry research online for information that’s available to the public.

3. Broaden your knowledge

Think beyond the confines of your own company and even your surrounding geographical area. Pay close attention to what’s happening on the national level. What’s happening with the economy that might affect your industry? As economists make predictions, consider what impact they might have on you.

4. Include multiple years

You might make your first-year projections monthly and include a lot of detail. For the next 2-4 years, you could use annual figures.

5. Consider creating two sets of financial projections

You could build projections for both worst- and best-case scenarios.

6. Be realistic but optimistic

Don’t inflate your numbers. The trained eyes of investors and bankers will know when the outlook is too rosy. And it won’t help you do your own internal planning if you’re overestimating your company’s potential. On the other hand, don’t low-ball yourself. You want to look like an attractive prospect to outsiders, and you want you and your staff to be challenged. It’s a delicate balance.

7. Get company-wide input

If your business is big enough to have multiple employees or even departments, get them involved in the process, just as you do when you’re preparing a budget. Your staff may have knowledge and insight in areas that you don’t.

8. Keep it simple

Financial projections are very, very complex. Make sure, though, that they’re clear and easily understood.

The mechanics of creating financial projections can be daunting, especially if you haven’t worked with spreadsheets or accounting software. We have extensive experience here, and we can help you take on this difficult but necessary process. Contact us, and we’ll help you get started.





Scott Miller is a Client Accounting Services Director at Lutz with over 16 years of related experience. He specializes in business consulting for closely held companies and outsourced accounting replacement services.

  • Outsourced Accounting Replacement Services
  • Business Consulting
  • Operational Analysis
  • Provider Compensation
  • Budgeting
  • Financial Benchmarking
  • Strategic Planning
  • Professional Services Industry
  • Private Practice Healthcare Industry
  • Dental Practices
  • Construction Industry
  • Restaurant Industry
  • American Institute of Certified Public Accountants, Member
  • Nebraska Society of Certified Public Accountants, Member
  • Certified Public Accountant
  • BSBA in Accounting, University of Nebraska, Kearney, NE
  • Creighton Prep Alumni Board of Trustees, Past Member
  • Ridgefield Homeowners Association, Treasurer
  • Omaha Suburban Baseball Association, Board Member


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