Developing Financial Forecasts for a Business PlanKim HostetlerSubbu Kumarappan

So, you want to start a business

• Having a great idea is not enough!• Everything needs to be put together in a

business plan or business model.

Financial Forecasting - Pro Forma Financial Statements

• Allow us to plan and budget• Planning is crucial for success•Where are we headed?• Did we get there?• Need to know• Revenue projections• Inventory purchases• Variable & Fixed costs

Overview of Financial Statements

Income Statement

Revenues - Expenses Net income Balance Sheet

Assets = Liabilities + Owner’s Equity

Statement of Cash Flows

Cash Inflow - Cash Outflow Net Cash Flow

Financial Forecasting - Pro Forma Financial Statements, continued

• This can be a daunting task!• Using Excel can make it easier

Making your forecasts realistic

• Compare with industry averages• RMA• BizMiner• IBIS World•Meet with Industry Experts

Questions?• Kim Hostetler, hostetler.78@osu.edu, 330-287-1256

• Subbu Kumarappan, kumarappan.1@osu.edu, 330-287-1261