what financial documents might be included in a business plan

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Start » startup, business plan financials: 3 statements to include.

The finance section of your business plan is essential to securing investors and determining whether your idea is even viable. Here's what to include.

If your business plan is the blueprint of how to run your company, the financials section is the key to making it happen. The finance section of your business plan is essential to determining whether your idea is even viable in the long term. It’s also necessary to convince investors of this viability and subsequently secure the type and amount of funding you need. Here’s what to include in your business plan financials.

[Read: How to Write a One-Page Business Plan ]

What are business plan financials?

Business plan financials is the section of your business plan that outlines your past, current and projected financial state. This section includes all the numbers and hard data you’ll need to plan for your business’s future, and to make your case to potential investors. You will need to include supporting financial documents and any funding requests in this part of your business plan.

Business plan financials are vital because they allow you to budget for existing or future expenses, as well as forecast your business’s future finances. A strongly written finance section also helps you obtain necessary funding from investors, allowing you to grow your business.

Sections to include in your business plan financials

Here are the three statements to include in the finance section of your business plan:

Profit and loss statement

A profit and loss statement , also known as an income statement, identifies your business’s revenue (profit) and expenses (loss). This document describes your company’s overall financial health in a given time period. While profit and loss statements are typically prepared quarterly, you will need to do so at least annually before filing your business tax return with the IRS.

Common items to include on a profit and loss statement :

• Revenue: total sales and refunds, including any money gained from selling property or equipment.
• Expenditures: total expenses.
• Cost of goods sold (COGS): the cost of making products, including materials and time.
• Gross margin: revenue minus COGS.
• Operational expenditures (OPEX): the cost of running your business, including paying employees, rent, equipment and travel expenses.
• Depreciation: any loss of value over time, such as with equipment.
• Earnings before tax (EBT): revenue minus COGS, OPEX, interest, loan payments and depreciation.
• Profit: revenue minus all of your expenses.

Businesses that have not yet started should provide projected income statements in their financials section. Currently operational businesses should include past and present income statements, in addition to any future projections.

[Read: Top Small Business Planning Strategies ]

A strongly written finance section also helps you obtain necessary funding from investors, allowing you to grow your business.

Balance sheet

A balance sheet provides a snapshot of your company’s finances, allowing you to keep track of earnings and expenses. It includes what your business owns (assets) versus what it owes (liabilities), as well as how much your business is currently worth (equity).

On the assets side of your balance sheet, you will have three subsections: current assets, fixed assets and other assets. Current assets include cash or its equivalent value, while fixed assets refer to long-term investments like equipment or buildings. Any assets that do not fall within these categories, such as patents and copyrights, can be classified as other assets.

On the liabilities side of your balance sheet, include a total of what your business owes. These can be broken down into two parts: current liabilities (amounts to be paid within a year) and long-term liabilities (amounts due for longer than a year, including mortgages and employee benefits).

Once you’ve calculated your assets and liabilities, you can determine your business’s net worth, also known as equity. This can be calculated by subtracting what you owe from what you own, or assets minus liabilities.

Cash flow statement

A cash flow statement shows the exact amount of money coming into your business (inflow) and going out of it (outflow). Each cost incurred or amount earned should be documented on its own line, and categorized into one of the following three categories: operating activities, investment activities and financing activities. These three categories can all have inflow and outflow activities.

Operating activities involve any ongoing expenses necessary for day-to-day operations; these are likely to make up the majority of your cash flow statement. Investment activities, on the other hand, cover any long-term payments that are needed to start and run your business. Finally, financing activities include the money you’ve used to fund your business venture, including transactions with creditors or funders.

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6 Small Business Financial Statements for Startup Financing

Financial Statements You'll Need for Your Startup Business Plan

You're ready to start your small business and your're working on a great business plan to take to a bank or other lender. A key part of that plan is the financial statements. These statements will be looked at carefully by the lender, so here are some tips for making these documents SELL your business plan . 

Financial Statements You Will Need

You may need several different types of statements, depending on the requirements of your lender and your own technical expertise. 

The statements you will certainly need are:

• A startup budget or cash flow statement
• A startup costs worksheet
• A pro forma (projected) profit and loss statement
• A pro forma (projected) balance sheet 

Your lender may also want these financial statements: 

• Sources and uses of funds statement
• Break-even analysis

Putting these Statements in Order

First, work on your startup budget and your startup costs worksheet. You'll need to do a lot of estimating.

The trick is to underestimate income and overestimate expenses, so you can create a more realistic picture of your business over the first year or two.

Then work on a profit and loss statement for the first year. A lender will definitely want to see this one. And, even though it's not going to be accurate, lenders like to see a startup balance sheet. 

Some lenders may ask for a break-even analysis, a cash flow statement, or a sources and uses of funds statement. We'll go over these statements so you can quickly provide them if asked.

Business Startup Budget

 A startup budget is like a projected cash flow statement, but with a little more guesswork.

Your lender wants to know your budget - that is, what you expect to bring in and how much to expect to spend each month. Lenders want to know that you can follow a budget and that you will not over-spend. 

They also want to see how much you will need to pay your bills while your business is starting out (working capital), and how long it will take you to have a positive cash flow (bring in more money than you are spending). 

Include some key information on your budget:

• What products or services you are selling, including prices and estimated volumes
• Key drivers for expenses, like how many employees you'll need and your marketing initiatives  

A typical budget worksheet should be carried through three years, so your lender can see how you expect to generate the cash to make your monthly loan payments.

Startup Costs Worksheet

A startup costs worksheet answers the question "What do you need the money for?" In other words, it shows all the purchases you will need to make in order to open your doors for business. This could be called a "Day One" statement  because it's everything you will need on your first day of business. 

• Facilities costs, like deposits on insurance and utilities
• Office equipment, computers, phones
• Supplies and advertising materials like signs and business cards
• Fees to set up your business website and email
• Legal fees licenses and permits

Profit and Loss Statement/Income Statement

After you have completed the monthly budget and you have gathered some other information, you should be able to complete a Profit and Loss  or Income Statement. This statement shows your business activity over a specific period of time, like a month, quarter, or year.

To create this statement, you'll need to list all your sources to get your gross income over that time. Then, list all expenses for the same time.

Because you haven't started yet, this statement is a called a projected P&L, because it projects out your estimates into the future.  

This statement gathers up all your sources of income, including shows your profit or loss for the year and how much tax you estimate having to pay.

Break-Even Analysis

A break-even analysis shows your lender that you know the point at which you will start making a profit or the price that will cover your fixed costs . The break-even analysis is primarily for businesses making or selling products, or to set the right price for a product or service.  

It's usually shown as a graph with sales volume on the X axis and revenue on the Y axis. Then fixed an variable costs (those you must pay) are included. The break-even point marks the place where costs are covered.

This analysis can also be useful for service-type businesses to show an overall profit point for specific services. If you include a break-even analysis, be sure you can explain it.

Beginning Balance Sheet

A startup balance sheet is difficult to prepare, even if there isn't much to include. The balance sheet shows the value of the assets you have purchased for startup, how much you owe to lenders and other creditors, and any initial investments you have made to get started. The date for this spreadsheet is the day you open the business.

Sources and Uses of Funds Statement

Large businesses use Sources and Uses of Funds statements in their annual reports, but you can create a slightly different simple statement to show your lender what you need the money for, what sources you have already, and what's left over to be financed.

To create this statement, list all your startup and working capital(on-going cash needs), how much collateral you will be bringing to the business, other sources of funding, and how much you need to borrow. 

Optional: A Business Requirements Document

 A business requirements document is similar to a proposal document, but for a larger, more complex project or startup. It gives a complete picture of the project or the business plan. It goes into more detail on the project that will be using the financial statements. 

Include Financial Statements in Your Business Plan

You will need a complete startup business plan to take to a bank or other business lender. The financial statements are a key part of this plan. Give the main points in the executive summary and include all the statements in the financial section. 

Finally, Check for Mistakes!

Before you submit your startup business plan and financial statements, check this list. Don't make these  common business plan mistakes !

Check all numbers for accuracy and consistency. Especially make sure the amounts you are requesting are specific and that they are the same throughout all the parts of your business plan.

SCORE.org. " How to Set Up and Maintain a Budget for Your Small Business ." Accessed Sept. 10, 2020.

SCORE.org. " Financial Projections Template ." Accessed Sept. 10, 2020.

Harvard Business Review. " A Quick Guide to Breakeven Analysis ." Accessed Sept. 10, 2020.

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Financial Plan in Business Plan: Essential Steps for Success

Executive summary of a financial plan

Revenue streams and sales forecasts, expense breakdown and management, cash flow analysis, capital and funding requirements, budget allocation and financial controls, financial statements overview, profitability and net worth, market analysis and forecasting, liabilities and risk management, financial planning and performance metrics, exit strategy and long-term financial planning.

Creating a financial plan in a business plan is a crucial step that can determine the success or failure of your venture. Whether you’re looking to attract investors, secure loans, or simply ensure long-term growth, a well-crafted financial plan provides the roadmap. It not only showcases your current financial health but also forecasts the potential profitability of your business. This article will summarize the key components and steps to help you craft a comprehensive financial plan aligning with your overall business goals.

Understanding how to incorporate a financial plan into your business strategy can set you apart. By learning the essentials, you’ll be better equipped to manage cash flow, estimate profits, and navigate financial challenges.

What is a financial plan in business planning?

What are the elements of a financial plan?

How to write a financial plan in a business plan?

What should be included in a financial plan?

What is the financial part of the business plan?

How do I write a financial plan?

How to write a financial summary for a business plan?

What’s the difference between a business plan and a financial plan?

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What is a financial plan in a business plan?

A financial plan is a key part of a business plan . It shows the money side of a business idea. This plan helps owners and investors see if the business can make money.

A financial plan has several important parts. It starts with a sales forecast that predicts how much money the business will make.

Next, it lists all the costs of running the business. This includes things like rent, supplies, and worker pay.

The plan also shows cash flow. This tells when money comes in and goes out of the business. It helps make sure there’s always enough cash to pay bills.

Profit and loss statements are another big piece. They show if the business is making or losing money over time.

The balance sheet lists what the business owns and owes.

Lastly, the plan may include goals for sales growth or profit. It might also have ways to reach these goals. All these parts work together to paint a clear money picture of the business.

Elements of a financial plan in a business plan

The elements of a financial plan in a business plan are essential to understanding your company’s financial health and future potential. They provide a detailed picture of revenue generation, cost management, and profitability.

A financial plan needs clear revenue projections. Sales forecasts help predict future income. This section examines how to make these forecasts and what numbers to include.

Sales forecasting methodology

Sales forecasts use past data and market trends. Start by looking at your sales history. Check for patterns in monthly or yearly sales. Then, factor in things that might change sales. This could be new products, more marketing, or changes in the market.

Use a simple model to start. Take last year’s sales and add expected growth.

As you get more data, you can make your model more complex. Some businesses forecast by product line. Others look at sales channels or customer types.

Remember to account for seasonal changes. Many businesses have busy and slow periods. Your forecast should reflect these ups and downs.

Projected sales numbers

Your sales projections should cover at least the next 12 months. Break this down by month. For years 2 and 3, you can use yearly totals.

Be realistic in your numbers. Aiming low and exceeding your goals is better than aiming too high.

Include unit sales and prices in your forecast. This helps you see if growth comes from selling more or raising prices. If you have multiple products, show sales for each one.

Here’s a simple example of a sales forecast table:

This table shows sales growth for two products over time. It’s a clear way to present your projected income.

A good expense breakdown helps businesses track and control costs. It shows where money goes and helps find ways to save.

Fixed and variable costs

Fixed costs stay the same each month. These include rent, insurance, and salaries.

Variable costs change based on sales or production. Examples are raw materials and shipping fees.

To manage fixed costs:

• Look for cheaper office space
• Negotiate better deals with suppliers
• Cut unneeded services

For variable costs:

• Buy in bulk for discounts
• Find more efficient ways to make products
• Use cheaper shipping methods when possible

Tracking both types of costs helps businesses plan better and save money.

Operational expenses analysis

This looks at the day-to-day costs of running a business. It includes things like:

• Office supplies
• Employee travel

To analyze these expenses:

• List all costs
• Group them by type
• Look at trends over time
• Compare to industry standards

This helps find areas to cut costs. For example, a business might see high utility bills and decide to use energy-saving light bulbs.

Regular expense reviews can lead to big savings. Even minor cuts in daily costs add up over time.

Cash flow analysis helps businesses track money coming in and going out. It shows if a company can pay its bills and invest in growth. This analysis uses cash flow statements and looks at investing and financing activities.

Cash flow statements

A cash flow statement shows how cash moves through a business. It has three parts: operations, investing, and financing.

The operations section shows money from sales and day-to-day activities. This part is key for seeing if the business makes enough to cover costs.

Cash flow statements also show changes in assets and debts. They help spot cash shortages before they happen.

Managers use these statements to plan for slow periods and growth.

Investing and financing activities

Investing activities involve buying or selling long-term assets. This includes things like equipment or property.

Financing activities show how a business raises and repays money.

Examples of financing activities are:

• Taking out loans
• Selling stock
• Paying dividends

These activities affect cash flow but aren’t part of regular operations. They’re important for growth and expansion. Businesses must balance investing in the future with having cash for daily needs.

Money is key for new businesses. You need to figure out how much cash you need and where to get it. This helps you start strong and grow.

Estimates for seed capital

Seed capital is the money to get your business going. You need to add up all your costs. Think about things like:

• Permits and licenses

Make a list of everything you’ll need to buy. Get price quotes when you can. Add some extra for surprise costs. This gives you a good guess at your total seed money needs.

Having enough cash for at least 6 months of expenses is smart. This helps if sales are slow at first.

Investor funding strategy

Once you know how much money you need, plan how to get it. You have a few choices:

• Use your own savings
• Ask family and friends
• Look for angel investors
• Try crowdfunding
• Apply for a business loan

Most new businesses use a mix of these. Your choice depends on how much cash you need and how fast your business might grow.

Make a strong pitch to investors. Show them why your business idea is great. Tell them how you’ll use their money and when they might see returns.

Be ready to give up some control of your business if you take investor money. Decide how much of your company you’re willing to sell.

A business plan needs a strong budget and financial controls. These help a company use its money wisely. Good budgets split cash between different parts of the business.

Budget allocation means giving money to each department. This is based on what the company wants to do. Some areas may get more money than others.

Here’s a simple example of how a small business might split its budget:

Financial controls are rules that keep spending in check. They make sure money is used as planned. This can include:

• Approval steps for big purchases
• Regular budget reviews
• Tracking of all income and spending

These controls help catch problems early. They also show where a company might save money.

Good budget allocation and controls lead to smart financial decisions. They help a business use its resources well. This can give the company an edge over others in its field.

Regular budget checks are key. They let a business change its plans if needed. This keeps the company on track to meet its goals.

Financial statements show a company’s money situation. They help business owners and investors see how well a company is doing. These statements include income, balance sheet, and profit and loss information.

Income statement details

The income statement shows how much money a company makes and spends. It lists sales, costs, and profits over a set time. This could be a month, quarter, or year.

The income statement starts with total sales. Then, it takes away costs like supplies and employee pay. What’s left is the profit.

Sales numbers come from what the company thinks it will sell. Expense numbers come from expected costs.

The difference between sales and expenses is gross profit. Take away other costs like taxes to get net profit. This final number tells if the company made or lost money.

Balance sheet insights

A balance sheet shows what a company owns and owes at a certain time. It has three main parts: assets, liabilities, and equity.

The company owns assets like cash, equipment, and buildings. Liabilities are what the company owes, like loans or bills. Equity is the money left over for owners if all debts are paid.

The balance sheet must always balance. This means assets must equal liabilities plus equity. If they don’t, there’s a mistake somewhere.

A strong balance sheet shows more assets than liabilities. This means the company can pay its bills and has room to grow.

Profit and loss statement analysis

The profit and loss statement (P&L) is like the income statement. It shows if a company made money over time.

The P&L starts with sales and takes away all costs. What’s left is the profit or loss.

This statement helps owners see where money comes from and where it goes.

The P&L can show trends over time. For example, it might show that sales go up in summer. Or it might show that some costs are too high.

A business financial plan shows how much money a company expects to make and keep. It also looks at the total value of the business.

Gross margin and net income projections

Gross margin is the money left after paying for materials and labor. It’s found by subtracting the cost of goods sold from total sales. A higher gross margin means the business is more profitable.

Net income is the profit after all expenses are paid. To project net income:

• Estimate sales for each month or quarter
• Subtract all costs and expenses
• Account for taxes

These numbers help owners see if the business will make money. They also show when cash might be tight.

Shareholder equity calculation

Shareholder equity is the company’s net worth. It’s what’s left after subtracting debts from assets. To calculate it:

• Add up all assets (cash, inventory, equipment)
• Subtract all liabilities (loans, bills to pay)

The result is shareholder equity. A growing net worth over time is a good sign. It means the business is becoming more valuable.

Investors look at this number to see how much their company share is worth. A strong net worth can help attract new investors or get loans.

Market analysis and forecasting help businesses understand their industry and plan for the future. These tools give key insights into competitors, trends, and financial projections.

Competitive market research

Businesses need to know who they’re up against. Market research looks at other companies selling similar products or services. This research covers things like:

• Competitor prices
• Product features
• Marketing strategies
• Market share

Understanding the competition helps a business find ways to stand out. It also shows gaps in the market that a company could fill.

Market research uses surveys, focus groups, and data analysis. These methods give a clear picture of what customers want and how much they’ll pay.

Trends affecting financial projections

Economic shifts and industry changes impact a company’s financial future. Some key trends to watch are:

• New technologies
• Consumer behavior changes
• Government regulations
• Economic growth or recession

These trends shape financial forecasts. For example, a new law might increase costs. Or a tech breakthrough could boost sales.

Financial forecasting uses past data and future predictions. It creates estimates for:

• Sales revenue

Good forecasts help with budgeting and planning. They also show potential investors what to expect.

A financial plan needs to address both liabilities and risks. Liabilities are what a business owes to others. Common liabilities include:

• Credit card balances
• Accounts payable

Tracking liabilities helps businesses understand their true financial position. It’s important to list all debts and when they’re due.

Risk management aims to protect a business from financial losses. Some key risks are:

• Economic downturns
• Property damage
• Data breaches

To manage risks, businesses can:

• Get insurance
• Create emergency funds
• Diversify income streams
• Have backup suppliers

A good risk management plan looks at what could go wrong and how to respond. It helps keep a business stable when facing challenges.

Businesses should review their liabilities and risks regularly. This allows them to spot issues early and make changes as needed. With careful planning, companies can reduce their financial risks and build a stronger future.

Financial planning and performance metrics are key tools for businesses to track their financial health and progress. They provide valuable insights into a company’s efficiency, profitability, and overall financial position.

Key financial ratios

Financial ratios help analyze different aspects of a business’s finances. The debt-to-equity ratio shows how much a company relies on debt versus equity funding. A lower ratio is often seen as better. The current ratio measures a firm’s ability to pay short-term debts. A ratio above 1 is good.

Profit margin is the percentage of sales that turn into profit. A higher margin means more efficient operations. Return on assets (ROA) shows how well a company uses its assets to generate profit. A higher ROA is better.

The inventory turnover ratio reveals how quickly a business sells its inventory. A higher ratio may indicate strong sales or good inventory management.

Performance benchmarking

Benchmarking compares a company’s performance to industry standards or competitors. It helps identify areas for improvement and set realistic goals.

The revenue growth rate is a key benchmark. It shows how fast a company expands compared to others in its industry. Gross profit margin compares a firm’s pricing and production costs to peers.

Market share is another important metric. It reveals a company’s position relative to competitors. Customer acquisition cost and retention rate are vital for assessing marketing effectiveness and customer satisfaction.

Employee productivity metrics, such as revenue per employee, can highlight operational efficiency compared to industry norms.

A business exit strategy is a plan for selling or leaving a company. It helps owners prepare for the future.

Exit plans are part of long-term financial planning.

There are several types of exit strategies:

• Selling to a buyer
• Passing the business to family
• Going public with an IPO
• Merging with another company
• Closing the business

Owners should think about their goals when choosing an exit strategy. Some may want to keep the business in the family. Others might prefer to sell for the highest price.

Exit planning takes time. Experts say to start 3-5 years before leaving.

This gives time to boost the company’s value. It also allows for finding the right buyers or successors.

A good exit plan includes:

• Business valuation
• Financial records
• List of assets
• Growth plans
• Potential buyers

Long-term financial planning helps with exit strategies. It involves setting goals and making plans to reach them.

This might include saving money, investing, or growing the business.

Regular financial check-ups are important. They help track progress toward exit goals.

Owners should review their plans yearly and adjust as needed.

A solid financial plan in your business plan is not just about crunching numbers— it’s about creating a clear path toward growth and stability.

Every component plays a role in guiding your business toward profitability, from financial statements to cash flow projections. Whether seeking funding or simply aiming to understand your finances better, a well-thought-out financial plan is indispensable.

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Short Term Goals for a Business: Driving Success in the Next Quarter

Short-term goals help businesses stay on track and make progress. These goals focus on what a company wants to achieve in the near future, usually within a few weeks or months. Setting clear short-term goals gives your business direction and helps you measure success. Short-term goals can cover many areas of a business. They may relate to sales, customer service,…

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.

Key Takeaways

• A business plan is a document detailing a company's business activities and strategies for achieving its goals.
• Startup companies use business plans to launch their venture and to attract outside investors.
• For established companies, a business plan helps keep the executive team focused on short- and long-term objectives.
• There's no single required format for a business plan, but certain key elements are essential for most companies.

Investopedia / Ryan Oakley

Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.

Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.

A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.

While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.

A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.

Common elements in many business plans include:

• Executive summary : This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services : Describe the products and services the company offers or plans to introduce. Include details on pricing, product lifespan, and unique consumer benefits. Mention production and manufacturing processes, relevant patents , proprietary technology , and research and development (R&D) information.
• Market analysis : Explain the current state of the industry and the competition. Detail where the company fits in, the types of customers it plans to target, and how it plans to capture market share from competitors.
• Marketing strategy : Outline the company's plans to attract and retain customers, including anticipated advertising and marketing campaigns. Describe the distribution channels that will be used to deliver products or services to consumers.
• Financial plans and projections : Established businesses should include financial statements, balance sheets, and other relevant financial information. New businesses should provide financial targets and estimates for the first few years. This section may also include any funding requests.

Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.

2 Types of Business Plans

Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These are detailed and lengthy, requiring more effort to create but offering comprehensive information that can be persuasive to potential investors.
• Lean startup business plans : These are concise, sometimes just one page, and focus on key elements. While they save time, companies should be ready to provide additional details if requested by investors or lenders.

Why Do Business Plans Fail?

A business plan isn't a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections. Markets and the economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All this calls for building flexibility into your plan, so you can pivot to a new course if needed.

How Often Should a Business Plan Be Updated?

How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While a well-established business might want to review its plan once a year and make changes if necessary, a new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.

A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.

As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.

University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.

Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

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4 Key Financial Statements For Your Startup Business Plan

• September 12, 2022

If you’re preparing a business plan for your startup, chances are that investors (or a bank) have also asked you to produce financial projections for your business. That’s absolutely normal: any startup business plan should at least include forecasts of the 3 financial statements.

The financial projections need to be presented clearly with charts and tables so potential investors understand where you are going, and how much money you need to get there .

In this article we explain you what are the 4 financial statements you should include in the business plan for your startup. Let’s dive in!

Financial Statement #1: Profit & Loss

The profit and loss (P&L) , also referred to as “income statement”, is a summary of all your revenues and expenses over a given time period .

By subtracting expenses from revenues, it gives a clear picture of whether your business is profitable, or loss-making. With the balance sheet and the cash flow statement, it is one of the 3 consolidated financial statements every startup must produce every fiscal year .

Most small businesses produce a P&L on a yearly basis with the help of their accountant. Yet it is good practice to keep track of all revenues and expenses on a monthly or quarterly basis as part of your budget instead.

When projecting your financials as part of your business plan, you must do so on a monthly basis. Usually, most startups project 3 years hence 36 months. If you have some historical performance (for instance you started your business 2 years ago), project 5 years instead.

Tech startup financial model templates

Download an expert-built 5-year Excel financial model for your business plan

Financial Statement #2: Cash Flow

Whilst your P&L includes all your business’ revenues and expenses in a given period, the cash flow statement records all cash inflows and outflows over that same period.

Some expenses are not necessarily recorded in your P&L but should be included in your cash flow statement instead. Why is that? There are 2 main reasons:

• Your P&L shows a picture of all the revenues you generated over a given period as well as the expenses you incurred to generate these revenues . If you sell $100 worth of products in July 2021 and incurred $50 cost to source them from your supplier, your P&L shows $100 revenues minus $50 expenses for that month. But what about if you bought a $15,000 car to deliver these products to your customers? The $15,000 should not be recorded as an expense in your P&L, but a cash outflow instead. Indeed, the car will help you generate revenues, say over the next 5 years, not just in July 2021
• Some expenses in your P&L are not necessarily cash outflows. Think depreciation and amortization expenses for instance: they are pure artificial expenses and aren’t really “spent”. As such, whilst your P&L might include a $100 depreciation expense, your cash flow remains the same.

Financial Statement #3: Balance Sheet

Whilst the P&L and cash flow statement are a summary of your financial performance over a given time period, the balance sheet is a picture of your financials at a given time.

The balance sheet lists all your business’ assets and liabilities at a given time (at end of year for instance). As such, it includes things such as:

• Assets: patents, buildings, equipments, customer receivables, tax credits etc. Assets can be either tangible (e.g. buildings) or intangible (e.g. customer receivables ).
• Liabilities: debt, suppliers payables, etc.
• Equity : the paid-in capital invested to date in the company (from you and any other potential investors). Equity also includes the cumulative result of your P&L: the sum of your profits and losses to date

Whilst P&L and cash flow statement are fairly simple to build when preparing your business plan, you might need help for your balance sheet.

Financial Statement #4: Use of Funds

The use of funds is not a mandatory financial statement your accountant will need to prepare every year. Instead, you shall include it in your startup business plan, along with the 3 key financial statements.

Indeed, the use of funds tells investors where you will spend your money over a given time frame. For instance, if you are raising $500k to open a retail shop, you might need $250k for the first year lease and another $250k for the inventory.

Use of funds should not be an invention from you: instead it is the direct result of your cash flow statement . If you are raising for your first year of business, and your projected cash flow statement result in a $500k loss (including all revenues and expenses), you will need to raise $500k.

For instance, using the example above, if you need $500k over the next 12 months, raise $600k or so instead. Indeed, better be on the safe side in case things do not go as expected!

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The 6 Most Useful Financial Documents for Small Businesses

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The day you opened your doors, you had an inkling of how much paperwork doing business would entail—from signing building leases to tracking customer receipts. But unless you were already familiar with bookkeeping basics , you might not have known just how crucial the right financial documents are to your success.

How so? Because the right financial information helps you check your business’s temperature. Are you running too hot, burning through cash too fast? Or is your business too cold, leaving you with fewer sales than you need to turn a net profit? The documents we list below will help you find out. Keep reading to learn what these documents are, how they work, and how they can help you keep your business in the black.

Six most useful financial documents for small businesses

• Income statement
• Cash flow statement
• Balance sheet
• Accounts receivable aging report
• Business plan
• Budget report

If you're searching for accounting software that's user-friendly, full of smart features, and scales with your business, Quickbooks is a great option.

1. Income statement

An income statement lists your revenue and expenses to indicate if your business is profitable or not—which is why an income statement is your business’s most important document.

To create an income statement, list all your sources of revenue (e.g., income from property you lease or money made from sales). Next, list your direct costs, or all the money you invest directly in creating your product or selling your service. When you subtract direct costs from revenue, you end up with your gross profit .

• Profit and loss statement (P&L)
• Statement of income
• Statement of operations
• Revenue statement

2. Cash flow statement

A cash flow statement documents how cash is flowing into and out of your business in three main categories: operations, investments, and financing. The statement shows which parts of your business are creating the most cash and which areas are spending the most cash.

Cash flow statements are useful for calculating upcoming budgets. For instance, if you have a negative cash flow, meaning you’re spending more money than you’re making, the statement clearly identifies places for you to cut back in next month’s budget.

Plus, if you’re looking for investors, the cash flow statement clearly shows if your business is profitable or not—which can impact who wants to invest and how much. And if the documents reveal you're likely to lose money, you might decide you need a small business loan until profit rolls in someday.

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3. Balance sheet

A balance sheet shows you if your assets balance with your liabilities at a specific moment in time. In other words, the document relies on a fundamental accounting equation:

Assets = Liabilities + Equity

Think of a balance sheet as a snapshot of your business’s financial health—on one side of the sheet, you list your (tangible and intangible) assets, and on the other side, you list your liabilities (like debts owed) and equity (the amount you or other shareholders invested in the company). The numbers on both sides of the sheet should be the exact same. If you have more liabilities than you do assets, you’re losing money and need to reevaluate.

And now that we've covered the top three most useful financial documents. we should tell you there are tools to help you manage all these jargon-laced papers. Accounting and bookkeeping software, such as Intuit QuickBooks , can offer a simple point-and-click solution. We recommend comparing some of the best bookkeeping software titles out there to discover the most ideal option for your business.

4. Accounts receivable aging report

The accounts receivable aging report (a.k.a. the A/R aging report or, simply, the aging report) is a list of overdue customer invoices. The aging report covers when a customer’s payment was due, how late the payment is, and how to contact the customer for collection purposes.

5. Business plan

A business plan maps out where your business is, where you hope it’s going, and how you plan to get there. The document can be pretty informal, especially if you just want to use it internally to guide your company’s strategy. But if you want to share your business plan with investors or lenders, you’ll want it to look a little more formal. In particular, it should include information about your business and the details of your financial plan.

6. Budget report

While other financial documents show you where your business stands, a budget report is a future projection based on the financial documents in your repertoire, particularly the cash flow statement and income statement. The numbers in a budget report estimate your projected income and losses over a specific period of time, from a month to several years. A bookkeeper or bookkeeping software can draw up a budget report template that makes the most sense for your unique business.

The takeaway

When you put in the time to assemble and analyze these financial documents, you’re giving yourself the tools to keep your small business on track. Set aside some time each week (at least!) to balance your books, draw up crucial financial reports, and create financial goals for the coming weeks, months, and years.

Need a way to quickly assemble accurate documents? See our page on the best bookkeeping software for small businesses.

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

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Primarily, these key financial documents are for you, but they’re also the first things other stakeholders will use to evaluate your business’s profitability. For instance, if you want to take out a small-business loan, your lender will always look at your income statement, business plan, and several other documents to boot.

You can draw up most of these documents using a spreadsheet program like Excel or Google Sheets. If you want to save time, accounting software like QuickBooks Online will generate these types of documents for you and help identify trends that could impact your bottom line.

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How to Complete the Financial Section of Business Plan

A plan intends to explain the business, introduce critical contributors, products and, services and defines the goals for the future. It paints a picture of the founder’s expectations and helps others see their vision. The financial section of the plan provides the proof behind the story. It is the section that investors and lenders are most interested in, and often the first section they read, despite it being near the end of the plan. It also acts as a roadmap and a guide for the direction the company will take into the future.

Financial Section Elements

While it may sound complicated, the financial section of a business plan only contains three documents and a brief explanation of each. It is necessary to prepare an income statement, cash flow projection and a balance sheet either using spreadsheets, or software that does all of the calculations automatically. Before beginning this statement, it’s necessary to gather the following information:

Business Start-Up Expenses

This list of all of the costs associated with getting the business up and running comprises what primarily are one-time fees such as registering the company. Following is only a partial list of possible start-up costs, every business is unique, and the list may, or may not, contain these items and more.

• Business registration fees
• Licensing and permits
• Product inventory
• Deposit on rental property
• Down payment to purchase property
• Down payment on machines and equipment
• Set-up fees for utilities

Business Operating Costs

As the name implies, operating costs are the ongoing expenses that need to be paid to keep the business running. These expenses are usually monthly bills, and for a start-up, estimate six months worth of these costs. A company’s list of operating expenses might include:

• Monthly mortgage payment or rent
• Logistics and distribution
• Marketing and promotion
• Loan paymentsRaw materials
• Office supplies
• Building/vehicle maintenance

The Income Statement

This financial statement details the company’s revenues, expenses, and profit for a set period. Established businesses generated these annually, or semi-annually, based on actual performance. Start-ups with no previous years to look at have to use statistical data within the industry to make reasonable projections. A start-up will also produce monthly versions of this statement to show the forecast of growth. This section will include the data such as:

• Gross revenue (sales, interest income and sales of assets)
• General and administrative expenses (start-up and operating costs)
• Corporate tax rate (expected tax liabilities)

The math is simple here: subtract the expenditures from the revenue, and the remaining number is profit. When put into the proper format, an income statement gives a clear view of the financial viability of a company.

Cash-Flow Projection

This statement shows how you expect cash to flow in to, and out of, your business. It’s an essential internal cash management tool and a source of data that shows what your business’s capital needs will be in the near future. For investors and bank loan officers, it helps determine your creditworthiness and amount you can borrow. The cash-flow projection contains three parts:

• Cash revenues — This part details the incoming cash from sales for specific periods of time, usually monthly. It is an estimate, based upon past performance and future projections for current businesses, and industry averages for start-ups.
• Cash disbursements — Every monthly bill or other expense that is paid out in cash gets listed in this section. As with revenue, these are estimates, either based upon historical data, current data, or industry data.
• Cash flow projection — This merely is a reconciliation of the cash revenues to cash disbursements. Adding the current month’s revenues to the carried-over balance, then subtracting the month’s disbursements creates estimated cash flow.

The Balance Sheet

The final financial statement required for the business plan’s financial section is a balance sheet. This statement is a snapshot of the company’s net worth at a given point in time. Established businesses produce a balance sheet annually. Information from the income statement and cash flow projection are used to complete this statement. It summarizes the business’s financial data into three main categories:

• Assets — This is the total of all of the tangible items that the company owns that hold monetary value. That includes equipment, property, and cash-on-hand, for example.
• Liabilities — This is the total amount of debt that the company owes its creditors. You’ll include every debt, whether recurring, one-time, fixed, or variable.
• Equity — This is merely the difference between the company’s assets, including retained earnings and current earnings, and its liabilities.

Side-Notes and Details

In some cases, it may be necessary to explain details within the financial statements. Denote these instances within the statement and include a brief explanation sheet as an attachment. It may also be useful to add information on the process used to estimate revenues and expenses, which will show interested parties the intent and help them better understand the data.

Don’t Sweat the Process

It’s important to note that the order in which these financial statements is created may vary from the way they are presented here. This is to be expected. In fact, most business plan creators end up going back and forth with these statements as the numbers reveal the business’s financial reality. It paints a crystal clear picture of its economic viability, which can present to a lender, investor, or shareholder with confidence.

All of these financial documents can be created by using accounting and business software readily available online. Even so, some people aren’t entirely comfortable creating financial statements for their business plan, and outsource this critical task to a professional. Even the largest corporations struggle with financial planning and reporting, and they often hire the job out to someone more qualified. It’s merely a matter of making sure that the data is accurate, easy to track, and based on sound accounting practices.

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How to Develop a Small Business Financial Plan

By Andy Marker | April 29, 2022

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Financial planning is critical for any successful small business, but the process can be complicated. To help you get started, we’ve created a step-by-step guide and rounded up top tips from experts.

Included on this page, you’ll find what to include in a financial plan , steps to develop one , and a downloadable starter kit .

What Is a Small Business Financial Plan?

A small business financial plan is an outline of the financial status of your business, including income statements, balance sheets, and cash flow information. A financial plan can help guide a small business toward sustainable growth.

Financial plans can aid in business goal setting and metrics tracking, as well as provide proof of profitable ideas. Craig Hewitt, Founder of Castos , shares that “creating a financial plan will show you if your business ideas are sustainable. A financial plan will show you where your business stands and help you make better decisions about resource allocation. It will also help you plan growth, survive cash flow shortages, and pitch to investors.”

Why Is It Important for a Small Business to Have a Financial Plan?

All small businesses should create a financial plan. This allows you to assess your business’s financial needs, recognize areas of opportunity, and project your growth over time. A strong financial plan is also a bonus for potential investors.

Mark Daoust , the President and CEO of Quiet Light Brokerage, Inc., explains why a financial plan is important for small businesses: “It can sometimes be difficult for business owners to evaluate their own progress, especially when starting a new company. A financial plan can be helpful in showing increased revenues, cash flow growth, and overall profit in quantifiable data. It's very encouraging for small business owners who are often working long hours and dealing with so many stressful decisions to know that they are on the right track.”

To learn more about other important considerations for a small business, peruse our list of free startup plan, budget, and cost templates .

What Does a Small Business Financial Plan Include?

All small businesses should include an income statement, a balance sheet, and a cash flow statement in their financial plan. You may also include other documents, such as personnel plans, break-even points, and sales forecasts, depending on the business and industry.

• Balance Sheet: A balance sheet determines the difference between your liabilities and assets to determine your equity. “A balance sheet is a snapshot of a business’s financial position at a particular moment in time,” says Yüzbaşıoğlu. “It adds up everything your business owns and subtracts all debts — the difference reflects the net worth of the business, also referred to as equity .” Yüzbaşıoğlu explains that this statement consists of three parts: assets, liabilities, and equity. “Assets include your money in the bank, accounts receivable, inventories, and more. Liabilities can include your accounts payables, credit card balances, and loan repayments, for example. Equity for most small businesses is just the owner’s equity, but it could also include investors’ shares, retained earnings, or stock proceeds,” he says.
• Cash Flow Statement: A cash flow statement shows where the money is coming from and where it is going. For existing businesses, this will include bank statements that list deposits and expenditures. A new business may not have much cash flow information, but it can include all startup costs and funding sources. “A cash flow statement shows how much cash is generated and used during a given period of time. It documents all the money flowing in and out of your business,” explains Yüzbaşıoğlu.
• Break-Even Analysis: A break-even analysis is a projection of how long it will take you to recoup your investments, such as expenses from startup costs or ongoing projects. In order to perform this analysis, Yüzbaşıoğlu explains, “You need to know the difference between fixed costs and variable costs. Fixed costs are the expenses that stay the same, regardless of how much you sell or don't sell. For example, expenses such as rent, wages, and accounting fees are typically fixed. Variable costs are the expenses that change in accordance with production or sales volume. “In other words, [a break-even analysis] determines the units of products or services you need to sell at least to cover your production costs. Generally, to calculate the break-even point in business, divide fixed costs by the gross profit margin. This produces a dollar figure that a company needs to break even,” Yüzbaşıoğlu shares.
• Personnel Plan: A personnel plan is an outline of various positions or departments that states what they do, why they are necessary, and how much they cost. This document is generally more useful for large businesses, or those that find themselves spending a large percentage of their budget on labor.
• Sales Forecast: A sales forecast can help determine how many sales and how much money you expect to make in a given time period. To learn more about various methods of predicting these figures, check out our guide to sales forecasting .

How to Write a Small Business Financial Plan

Writing a financial plan begins with collecting financial information from your small business. Create income statements, balance sheets, and cash flow statements, and any other documents you need using that information. Then share those documents with relevant stakeholders.

“Creating a financial plan is key to any business and essential for success: It provides protection and an opportunity to grow,” says Yüzbaşıoğlu. “You can use [the financial plan] to make better-informed decisions about things like resource allocation on future projects and to help shape the success of your company.”

1. Create a Plan

Create a strategic business plan that includes your business strategy and goals, and define their financial impact. Your financial plan will inform decisions for every aspect of your business, so it is important to know what is important and what is at stake.

2. Gather Financial Information

Collect all of the available financial information about your business. Organize bank statements, loan information, sales numbers, inventory costs, payroll information, and any other income and expenses your business has incurred. If you have not already started to do so, regularly record all of this information and store it in an easily accessible place.

3. Create an Income Statement

Your income statement should display revenue, expenses, and profit for a given time period. Your revenue minus your expenses equals your profit or loss. Many businesses create a new statement yearly or quarterly, but small businesses with less cash flow may benefit from creating statements for shorter time frames.

4. Create a Balance Sheet

Your balance sheet is a snapshot of your business’s financial status at a particular moment in time. You should update it on the same schedule as your income statement. To determine your equity, calculate all of your assets minus your liabilities.

5. Create a Cash Flow Statement

As mentioned above, the cash flow statement shows all past and projected cash flow for your business. “Your cash flow statement needs to cover three sections: operating activities, investing activities, and financing activities,” suggests Hewitt. “Operating activities are the movement of cash from the sale or purchase of goods or services. Investing activities are the sale or purchase of long-term assets. Financing activities are transactions with creditors and investments.”

6. Create Other Documents as Needed

Depending on the age, size, and industry of your business, you may find it useful to include these other documents in your financial plan as well.

• Sales Forecast: Your sales forecast should reference sales numbers from your past to estimate sales numbers for your future. Sales forecasts may be more useful for established companies with historical numbers to compare to, but small businesses can use forecasts to set goals and break records month over month. “To make future financial projections, start with a sales forecast,” says Yüzbaşıoğlu. “Project your sales over the course of 12 months. After projecting sales, calculate your cost of sales (also called cost of goods or direct costs). This will let you calculate gross margin. Gross margin is sales less the cost of sales, and it's a useful number for comparing with different standard industry ratios.”

7. Save the Plan for Reference and Share as Needed

The most important part of a financial plan is sharing it with stakeholders. You can also use much of the same information in your financial plan to create a budget for your small business.

Additionally, be sure to conduct regular reviews, as things will inevitably change. “My best tip for small businesses when creating a financial plan is to schedule reviews. Once you have your plan in place, it is essential that you review it often and compare how well the strategy fits with the actual monthly expenses. This will help you adjust your plan accordingly and prepare for the year ahead,” suggests Janet Patterson, Loan and Finance Expert at  Highway Title Loans.

Small Business Financial Plan Example

Download Small Business Financial Plan Example Microsoft Excel | Google Sheets

Here is an example of what a completed small business financial plan dashboard might look like. Once you have completed your income statement, balance sheet, and cash flow statements, use a template to create visual graphs to display the information to make it easier to read and share. In this example, this small business plots its income and cash flow statements quarterly, but you may find it valuable to update yours more often.

Small Business Financial Plan Starter Kit

Download Small Business Financial Plan Starter Kit

We’ve created this small business financial plan starter kit to help you get organized and complete your financial plan. In this kit, you will find a fully customizable income statement template, a balance sheet template, a cash flow statement template, and a dashboard template to display results. We have also included templates for break-even analysis, a personnel plan, and sales forecasts to meet your ongoing financial planning needs.

Small Business Income Statement Template 

Download Small Business Income Statement Template Microsoft Excel | Google Sheets

Use this small business income statement template to input your income information and track your growth over time. This template is filled to track by the year, but you can also track by months or quarters. The template is fully customizable to suit your business needs.

Small Business Balance Sheet Template 

Download Small Business Balance Sheet Template Microsoft Excel | Google Sheets

This customizable balance sheet template was created with small businesses in mind. Use it to create a snapshot of your company’s assets, liabilities, and equity quarter over quarter. 

Small Business Cash Flow Statement Template 

Download Small Business Cash Flow Template Microsoft Excel | Google Sheets

Use this customizable cash flow statement template to stay organized when documenting your cash flow. Note the time frame and input all of your financial data in the appropriate cell. With this information, the template will automatically generate your total cash payments, net cash change, and ending cash position.

Break-Even Analysis Template 

Download Break-Even Analysis Template Microsoft Excel | Google Sheets

This powerful template can help you determine the point at which you will break even on product investment. Input the sale price of the product, as well as its various associated costs, and this template will display the number of units needed to break even on your initial costs.

Personnel Plan Template  

Download Personnel Plan Template Microsoft Excel | Google Sheets

Use this simple personnel plan template to help organize and define the monetary cost of the various roles or departments within your company. This template will generate a labor cost total that you can use to compare roles and determine whether you need to make cuts or identify areas for growth.

Sales Forecast Template

Download Sales Forecast Template Microsoft Excel | Google Sheets

Use this customizable template to forecast your sales month over month and determine the percentage changes. You can use this template to set goals and track sales history as well.

Small Business Financial Plan Dashboard Template

Download Small Business Financial Plan Dashboard Template Microsoft Excel | Google Sheets

This dashboard template provides a visual example of a small business financial plan. It presents the information from your income statement, balance sheet, and cash flow statement in a graphical form that is easy to read and share.

Tips for Completing a Financial Plan for a Small Business

You can simplify the development of your small business financial plan in many ways, from outlining your goals to considering where you may need help. We’ve outlined a few tips from our experts below:

• Outline Your Business Goals: Before you create a financial plan, outline your business goals. This will help you determine where money is being well spent to achieve those goals and where it may not be. “Before applying for financing or investment, list the expected business goals for the next three to five years. You can ask a certified public accountant for help in this regard,” says Thé. The U.S. Small Business Administration or a local small business development center can also help you to understand the local market and important factors for business success. For more help, check out our quick how-to guide on writing a business plan .
• Make Sure You Have the Right Permits and Insurance: One of the best ways to keep your financial plan on track is to anticipate large expenditures. Double- and triple-check that you have the permits and insurances you need so that you do not incur any fines or surprise expenses down the line. “If you own your own business, you're no longer able to count on your employer for your insurance needs. It's important to have a plan for how you're going to pay for this additional expense and make sure that you know what specific insurance you need to cover your business,” suggests Daost.
• Separate Personal Goals from Business Goals: Be as unbiased as possible when creating and laying out your business’s financial goals. Your financial and prestige goals as a business owner may be loftier than what your business can currently achieve in the present. Inflating sales forecasts or income numbers will only come back to bite you in the end.
• Consider Hiring Help: You don’t know what you don’t know, but fortunately, many financial experts are ready to help you. “Hiring financial advisors can help you make sound financial decisions for your business and create a financial roadmap to follow. Many businesses fail in the first few years due to poor planning, which leads to costly mistakes. Having a financial advisor can help keep your business alive, make a profit, and thrive,” says Hewitt.
• Include Less Obvious Expenses: No income or expense is too small to consider — it all matters when you are creating your financial plan. “I wish I had known that you’re supposed to incorporate anticipated internal hidden expenses in the plan as well,” Patterson shares. “I formulated my first financial plan myself and didn’t have enough knowledge back then. Hence, I missed out on essential expenses, like office maintenance, that are less common.”

Do Small Business Owners Need a Financial Planner?

Not all small business owners need a designated financial planner, but you should understand the documents and information that make up a financial plan. If you do not hire an advisor, you must be informed about your own finances.

Small business owners tend to wear many hats, but Powell says, “it depends on the organization of the owner and their experience with the financial side of operating businesses.” Hiring a financial advisor can take some tasks off your plate and save you time to focus on the many other details that need your attention. Financial planners are experts in their field and may have more intimate knowledge of market trends and changing tax information that can end up saving you money in the long run. 

Yüzbaşıoğlu adds, “Small business owners can greatly benefit from working with a financial advisor. A successful small business often requires more than just the skills of an entrepreneur; a financial advisor can help the company effectively manage risks and maximize opportunities.”

For more examples of the tasks a financial planner might be able to help with, check through our list of free financial planning templates .

Drive Small Business Success with Financial Planning in Smartsheet

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How to Craft the Financial Section of Business Plan (Hint: It’s All About the Numbers)

Writing a small business plan takes time and effort … especially when you have to dive into the numbers for the financial section. But, working on the financial section of business plan could lead to a big payoff for your business.

Read on to learn what is the financial section of a business plan, why it matters, and how to write one for your company.  

What is the financial section of business plan?

Generally, the financial section is one of the last sections in a business plan. It describes a business’s historical financial state (if applicable) and future financial projections. Businesses include supporting documents such as budgets and financial statements, as well as funding requests in this section of the plan.  

The financial part of the business plan introduces numbers. It comes after the executive summary, company description , market analysis, organization structure, product information, and marketing and sales strategies.

Businesses that are trying to get financing from lenders or investors use the financial section to make their case. This section also acts as a financial roadmap so you can budget for your business’s future income and expenses. 

Why it matters 

The financial section of the business plan is critical for moving beyond wordy aspirations and into hard data and the wonderful world of numbers. 

Through the financial section, you can:

• Forecast your business’s future finances
• Budget for expenses (e.g., startup costs)
• Get financing from lenders or investors
• Grow your business

• Growth : 64% of businesses with a business plan were able to grow their business, compared to 43% of businesses without a business plan.
• Financing : 36% of businesses with a business plan secured a loan, compared to 18% of businesses without a plan.

So, if you want to possibly double your chances of securing a business loan, consider putting in a little time and effort into your business plan’s financial section. 

Writing your financial section

To write the financial section, you first need to gather some information. Keep in mind that the information you gather depends on whether you have historical financial information or if you’re a brand-new startup. 

Your financial section should detail:

• Business expenses 

Financial projections

Financial statements, break-even point, funding requests, exit strategy, business expenses.

Whether you’ve been in business for one day or 10 years, you have expenses. These expenses might simply be startup costs for new businesses or fixed and variable costs for veteran businesses. 

Take a look at some common business expenses you may need to include in the financial section of business plan:

• Licenses and permits
• Cost of goods sold 
• Rent or mortgage payments
• Payroll costs (e.g., salaries and taxes)
• Utilities 
• Equipment 
• Supplies 
• Advertising 

Write down each type of expense and amount you currently have as well as expenses you predict you’ll have. Use a consistent time period (e.g., monthly costs). 

Indicate which expenses are fixed (unchanging month-to-month) and which are variable (subject to changes). 

How much do you anticipate earning from sales each month? 

If you operate an existing business, you can look at previous monthly revenue to make an educated estimate. Take factors into consideration, like seasonality and economic ups and downs, when basing projections on previous cash flow.

Coming up with your financial projections may be a bit trickier if you are a startup. After all, you have nothing to go off of. Come up with a reasonable monthly goal based on things like your industry, competitors, and the market. Hint : Look at your market analysis section of the business plan for guidance. 

A financial statement details your business’s finances. The three main types of financial statements are income statements, cash flow statements, and balance sheets.

Income statements summarize your business’s income and expenses during a period of time (e.g., a month). This document shows whether your business had a net profit or loss during that time period. 

Cash flow statements break down your business’s incoming and outgoing money. This document details whether your company has enough cash on hand to cover expenses.

The balance sheet summarizes your business’s assets, liabilities, and equity. Balance sheets help with debt management and business growth decisions. 

If you run a startup, you can create “pro forma financial statements,” which are statements based on projections.

If you’ve been in business for a bit, you should have financial statements in your records. You can include these in your business plan. And, include forecasted financial statements. 

You’re just in luck. Check out our FREE guide, Use Financial Statements to Assess the Health of Your Business , to learn more about the different types of financial statements for your business.

Potential investors want to know when your business will reach its break-even point. The break-even point is when your business’s sales equal its expenses. 

Estimate when your company will reach its break-even point and detail it in the financial section of business plan.

If you’re looking for financing, detail your funding request here. Include how much you are looking for, list ideal terms (e.g., 10-year loan or 15% equity), and how long your request will cover. 

Remember to discuss why you are requesting money and what you plan on using the money for (e.g., equipment). 

Back up your funding request by emphasizing your financial projections. 

Last but not least, your financial section should also discuss your business’s exit strategy. An exit strategy is a plan that outlines what you’ll do if you need to sell or close your business, retire, etc. 

Investors and lenders want to know how their investment or loan is protected if your business doesn’t make it. The exit strategy does just that. It explains how your business will make ends meet even if it doesn’t make it. 

When you’re working on the financial section of business plan, take advantage of your accounting records to make things easier on yourself. For organized books, try Patriot’s online accounting software . Get your free trial now!

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What to Include in Your Business Plan Appendix

In the meticulous process of drafting a business plan, the appendix often plays an underestimated yet pivotal role. What are appendices? This segment, known as the “appendix in business plan”, serves as a reservoir for critical supporting documents and data. Far from being a mere afterthought, it is an integral component that complements the main content, offering in-depth details that investors and stakeholders might seek.

Understanding what is an appendix in a business plan is key to leveraging its full potential. It’s a section where you house vital information which, while not central to the plan’s narrative, is essential for substantiating your strategies and projections. 

Moreover, the purpose of including supporting documents in a business plan is to represent the robustness of your research, the depth of your planning, and your readiness for the challenges of the entrepreneurial journey. 

Therefore, in this guide, we will delve deep into the art and science of curating a well-structured and comprehensive business plan appendix. We’ll explore what goes into an appendix, how to organize an appendix effectively, and why a meticulously crafted appendix can be a game-changer for your business venture.

What Goes in An Appendix?

Aside from thinking of how to make an appendix , businesses also often wonder what to include in an appendix when developing a business plan. To answer this common query, this section is where you provide the supplementary material that validates your business plan. Let’s dissect the essential contents that form the backbone of a robust business plan appendix section. The appendix of a business plan might include:

• Detailed Financial Projections: As a cornerstone of appendices in business plan, this includes comprehensive revenue forecasts , cash flow statements , and break-even analysis. These documents elevate your financial strategy from theory to actionable insights.
• Market Research Data: Your business plan appendix example isn’t complete without the data that underscores your market understanding . Include demographic studies, industry analysis, and competitive landscape assessments.
• Resumes of Key Personnel: Illustrate the strength of your team by including detailed resumes. This section answers what goes in the appendix from a human resource perspective, showcasing the expertise and experience driving your business.
• Product or Service Descriptions: Here, an appendix document example involves detailed information about your products or services. This can include brochures, technical specifications, and product development plans.
• Legal Documents: Integral to what should be included in an appendix, this encompasses licenses, permits, patents, trademarks, and any other legal paperwork that is pertinent to your business operations.
• Supporting Letters: The appendix of a business plan includes any endorsements from key stakeholders, such as letters of intent from potential customers or testimonials from partners, adding credibility to your plan.
• Additional Operational Information: This might cover the appendix business plan example components like your organizational chart, facilities descriptions, and equipment listings, depending on the nature of your business.
• Marketing Materials and Strategies: These documents outline your marketing plan appendix. Marketing documentation typically includes advertising samples, press releases, and digital marketing strategies , all vital in illustrating how you intend to capture and grow your market share.

The Don’ts of a Business Plan Appendix

When crafting a business plan appendix, understanding the elements that should not be included is as crucial as knowing what to put in an appendix. The appendix should not be a dumping ground for all information. Avoid overloading it with irrelevant or redundant documents that do not directly support your business strategy .

For instance, what information should not be included in a business plan typically extends to outdated financial statements, overly technical jargon without clear explanations, and any personal or confidential information not pertinent to the business goals.

Additionally, avoid including excessively lengthy documents; the appendix in documents should complement your plan, not overshadow it. Remember, every page in your appendix should have a purpose and add value to your business plan, helping the reader understand and evaluate your business proposition effectively, without unnecessary clutter or distractions.

Understanding why a comprehensive and well-structured appendix is pivotal to business plans is key to elevating your strategy. Why do reports frequently include appendices? The appendix of a report is not just an add-on but a strategic tool that enhances the credibility and depth of your business plan. Business appendix writing should provide essential, supporting details in an organized and accessible way, complementing your vision and illustrating the thoroughness and feasibility of your proposal.

Keep in mind, the appendix is a valuable but optional section of your business plan. There’s no need to stress excessively about its contents. As you develop your plan, simply earmark any pertinent documents or data for inclusion in your appendix.

Struggling with the complexities of crafting your business plan? Get a head start with our no-cost, comprehensive business plan template . It comes complete with a predefined structure that simplifies organizing and presenting your supporting documents effectively.

Not entirely sure what to include in your business plan appendix? In a landscape where precision and foresight are invaluable, let BSBCON help you turn your business plan into a compelling and comprehensive guide to your business’s future.

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What to Include in Your Business Plan Appendix

Candice Landau

4 min. read

Updated July 11, 2024

While not required, a well-structured business plan appendix goes a long way toward convincing lenders and investors that you have a great business idea and a viable business.

This article will cover what should be part of the appendix in your business plan and best practices for making it a useful part of your business plan . 

• What is a business plan appendix?

A business plan appendix provides supporting documentation for the other sections of your business plan .  

The appendix for business plans typically comes last and includes any additional documents, spreadsheets, tables, or charts that don’t fit within the main sections of your plan. 

What goes in the appendix of a business plan?

In general, here is some of the information you might include in your business plan appendix:

• Charts, graphs, or tables that support sections of your business plan
• Financial statements and projections
• Sales and marketing materials
• Executive team resumes
• Credit history
• Business and/or personal tax returns
• Agreements or contracts with clients or vendors
• Licenses, permits , patents, and trademark documentation
• Product illustrations or product packaging samples
• Building permit and equipment lease documentation
• Contact information for attorneys , accountants, and advisors

You may include some, all, or none of these documents in your business plan appendix. It depends on your business needs and who you share your business plan with. 

Tip: Like your executive summary , adjusting what’s in your business plan appendix may be helpful based on the intended audience. For example, if you’re applying for a loan, you may add financial statements from the past 2-5 years to show how your business has performed.

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Business plan appendix best practices

Here are a few tips to help you create an appendix for your business plan.

Make it easy to navigate

If your business plan appendix is more than a few pages long or contains a variety of documents, you may want to consider adding a separate table of contents.

Don’t forget security

If you share confidential information within the business plan appendix, you will also want to keep track of who has access to it. 

A confidentiality statement is a good way to remind people that the content you share should not be distributed or discussed beyond the agreed parties. You can include it as a separate page or as part of your business plan cover page .

Make the appendix in your business plan work as a separate document

Given that the appendix is the last part of the business plan, it’s quite likely your readers will skip it. 

For this reason, it’s important to ensure your business plan can stand on its own. All information within the appendix should be supplementary. 

Ask yourself: if the reader skipped this part of my plan, would they still understand my idea or business model ? If the answer is no, you may need to rethink some things.

Connect the appendix to sections of your business plan

Make sure that anything you include in the business plan appendix is relevant to the rest of your business plan. It should not be unrelated to the materials you’ve already covered. 

It can be useful to reference which section of your plan the information in your appendix supports. Use footnotes, or if it’s digital, provide links to other areas of your business plan.

Keep it simple

This is good general advice for your entire business plan. 

Keep it short. 

You don’t need to include everything. Focus on the relevant information that will give your reader greater insight into your business or more detailed financial information that will supplement your financial plan.

Free business plan template with appendix example

Remember, your appendix is an optional supporting section of your business plan. Don’t get too hung up on what to include. You can flag documents and information you believe are worth including in your appendix as you write your plan . 

Need help creating your business plan? 

Download our free fill-in-the-blank business plan template with a pre-structured format for your appendix. 

And to understand what you should include based on your industry—check out our library of over 550 business plan examples .

Business plan appendix FAQ

How do you write an appendix for a business plan?

Gather relevant documents like financial statements, team resumes, and legal permits. Organize them logically, possibly mirroring your business plan’s structure. If long, include a table of contents, ensure each item is relevant, and focus on keeping it simple. If you’re sharing sensitive information, add a confidentiality statement.

Why is a business plan appendix important?

An appendix in your business plan provides supporting evidence for your business plan. It keeps your main plan more concise, enhances credibility with additional data, and can house all-important business documents associated with your business.

What additional information would appear in the appendix of the business plan?

The following can appear in your business plan appendix:

• Financial projections
• Marketing materials
• Team resumes
• Legal documents (like permits and patents)
• Product details (like prototypes and packaging)
• Operational documents (like building permits)
• Professional contact information. 

Candice Landau is a marketing consultant with a background in web design and copywriting. She specializes in content strategy, copywriting, website design, and digital marketing for a wide-range of clients including digital marketing agencies and nonprofits.

Table of Contents

• What goes in the appendix?
• Best practices
• Free template

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15+ Key Business Documents Every Workplace Needs

The workplace of today has never been busier, and the deciding factor in whether a business is successful or not depends on the ability to make effective use of business documents. A survey done by AIIM has shown that 3 out of every 5 businesses run into legal issues due to poor documentation. 

A report by the Ponemon Institute reports that Data breaches cost companies millions of dollars every year. That’s money lost because of poor handling of these very important documents.

Studies from the Business Harvard Review show that strategic planning put into the proper use of documents increases the profits of businesses by 12%. That’s just from organizational infrastructure changes alone.

Business Documents affect every aspect of a business from its internal affairs to its relationship with prospective investors and consumers. So, in essence the importance of business documents can’t be emphasized enough.

What Are Business Documents?

Business documents are reports, files, letters, and other information about a business’s operations. They come in various formats, whether being written, printed or existing as digital computer files.

Business documents include operational and organizational details and information such as its hierarchical structure, operational and work processes as well as guidelines. Agreements are also business documents containing the terms to which several parties have agreed to a contract.

Business documents allow the workers of the establishment to know what is expected of them as well as their roles to ensure organization is maintained as well as operations are as efficient as possible. 

Studies have shown that employees spend an average of 30% of their workday looking for information they need within business documents. This statistic underscores how integral business documents are to the overall success of a business. 

Business documents such as reports, financial statements and invoices also allow the company to have a track record of its history to make better-informed decisions in the future.

Protection of interest and property is another function of business documents. Agreements and contracts give companies and their partners legal accountability.

Types Of Business Documents with Common Examples

1. contracts.

A contract is a legally binding agreement between two or more parties. These parties may include a business, employees, third parties, and other entities. It is a document which states the nature and terms of collaboration between those involved.

A contract contains the offer, or the deal being made together with what parties stand to gain from it as well as the consent of the parties involved to be involved in such contract as well as the legal repercussions involved if such contract is breached.

Client contracts are important so parties can be held accountable while having their interests protected by the law. This allows one party to take legal action against the other in the case of a breach.

a. Partnership Agreements 

A partnership agreement is a type of contract between business partners with details of their roles in the collaboration as well as their contribution, dividend share, and the terms that both parties have honored. This document formalizes partnerships and allocates risks and rewards as both parties see fit.

b. Non-Disclosure Agreements

A nondisclosure agreement is a legal contract that protects and keeps confidential information disclosed between parties. The agreement could be about trade or business strategies. This is done so that sensitive information cannot be leaked to entities that could cause harm to a business in any way.

c. Lease Agreement

Lease agreement between a property owner and a party who wishes to have the property leased to them. This contract contains terms and conditions as well as other information such as rent amount and duration.

2. Corporate Bylaws

This is a document containing rules governing the affairs of behavior in a business. Authored by the management, it contains rules applicable to members of the business such as its employees. It informs them of what the expectations are as well as what is not allowed

a. Organizational Structure Bylaws

Organizational structure bylaws govern all the individuals working in a business. It shows the rules that each member of staff is bound by their position as well as the responsibilities entrusted to them.

b. Shareholder Rights Bylaws

Shareholder rights bylaw that shows the rules that shareholders of a business must abide by. It contains information on things such as voting rights and dividend shares.

3. Business Plan 

A business plan is a detailed document of a business strategy for its goals. It contains all the details related to its vision, its proposed method of operation, and projected prospects. A good business plan contains a description of the business, a market analysis of what it wishes to venture into, a proposed organizational structure, financing details, and an analysis of the market.

Having a well-documented business plan allows you to attract investors and secure business funding from external parties, thanks to the ease of communication it provides.

A good business plan also affords you the chance to track your performance over a period and assess your progress. Risks can also be avoided and mitigated as they have been considered beforehand.

4. Financial Documents

These business documents provide information and insight into the financial position of the venture. They include reports and statements on the monetary aspect of the business. The various financial documents a business has at its disposal allow it to be transparent with stakeholders as well as evaluate performance to make better rational decisions.

a. Income Statement

An income statement includes information about a company's sales, costs of operation, and profit for a given time frame. It is an overall evaluation of the company's financial performance.

b. Balance Sheet

The balance sheet is a type of financial document that shows the assets, liability, and shareholder equity of a business at a given point. It helps stakeholders see the financial standing of the business.

5. Transactional Documents

These are business documents that capture individual minute financial activity. They are similar to financial documents but unlike financial documents, they do not contain enough overarching information but rather minute details. They allow the company to know every single transaction that goes on in the business.

Examples Of Transactional Documents

6. business reports .

A business report is a document that in detail gives an account of the current state of the business and its internal affairs. It touches on all elements of the business's existence from its finances to achievements, challenges, experiences, and so forth.

7. Minutes Of Business Meeting

Minutes from business meetings are formal records of the decisions, debates, and actions that take place during a meeting. It is a transcription of the entire meeting. For a business to maintain accountability among its teams and employees, minutes are crucial. It helps with continuity with future meetings and serves as a future reference file.

8. Letters And Memos

Letters and memos in the business’ serve the purpose of communication. This is an important element in ensuring the success of any establishment. They are considered formal means of communication that are kept brief and objective and demand an action or a follow-up at the end.

• Business letters are documents that serve as communication between business and external parties such as contractors, partners, clients, and several others.
• Memorandums , known simply shortly as ‘memos’ are documents that serve as a means of communication internally within a business. They are normally either employees or board members.

9. HR Documents

Given the nature of HR relations and how it must do a lot with employers communicating with employees. This passage of information is done with various HR documents. These are documents that cater to different elements of human resource management such as hiring, onboarding, promotion, assignment, and others. These documents help manage human resources better and are ideally managed and stored within HR software .

a. Job Description 

This is an HR document that has the details of the job an employee has. It contains information on the role, its responsibilities, and expectations. Job descriptions ensure clarity for employees and an easy measure for performance to be evaluated.

b. Onboarding Documents

These normally come in forms and are given to individuals who are about to be officially employed. The purpose of this document is for businesses to collect and have essential information about their staff.

c. Performance Appraisal Forms 

Performance Appraisal Forms are documents that essentially rate an employee’s performance in their role. It allows the employee to know how good they are working, and if they may need to adjust or improve.

d. Disciplinary Action Forms

In situations of misconduct by an employee, a disciplinary action form is used to exert corrective action towards such employee.

10. Marketing Materials

Marketing materials are business documents that also come in the format of media with appealing visuals such as colorful graphics to promote the business’s products or services. It is intended to get the attention of potential customers and clients and generate leads as well as close sales.

a. Business Cards

These are small portable cards that can fit in wallets and purses that contain contact information and brand elements of the business. 

b. Catalogs

Catalogs are comprehensive manuals that include details of every product and service a company offers. Customers can use the information on the document to make informed selections about the service or product from the company they want or need.

c. Brochures And Flyers

Brochures and flyers are business documents that serve to catch the attention of an audience with strong use of visual elements as well as pass important information to customers and an audience on a key event or development such as a new product.

d. Newsletters

Newsletters contain news and valuable information to regularly subscribed customers. They are regularly distributed on a fixed-time basis. It helps to keep the core target audience of a business informed of trends and developments.

11. Proposals And Bids

Proposals and bids outline how a business intends to carry out a business. It contains details of the work to be done as well as the costs and timeline. It is written in such a way to highlight the prospects of such an idea, and it is only produced when there is a request for a proposal or an invitation to bid.

a. Solicited Proposal

These are proposals that are submitted after a request for them by a business. The business highlights what they are looking for and interested parties are invited to detail in a document how they will meet client demands.

b. Unsolicited Proposal 

These are proposals that are submitted without a request for them. Because of this, they are aimed at identifying potential opportunities to take advantage of.

12. Board Resolutions

Board resolutions show a decision that the board of directors of a business has agreed to make. This may be a decision affecting the future or a policy of a business.

a. Ordinary Resolution

This a decision where once over half of the board members vote for it the resolution has been met. This is the case for decisions that can be considered basic or routine.

b. Special Resolution

This is a decision where up to three quarters of the board members present have to pass a vote for a decision to turn into a resolution. Decisions such as changing a business’ byelaws, acquiring or forming mergers require a special resolution.

13. Business Pitch

A business pitch is a document written concisely and in a persuasive tone directed at potential investors, clients, or partners. It contains details on the value of a business idea highlighting an idea’s potential and the solutions it can bring about.

a. Elevator Pitch

This is a short pitch that isn’t too detailed but serves the main purpose of capturing attention and sparking intrigue with the desired result to facilitate further discussions later.

b. Investor Pitch

This is the type of pitch that is more detailed and contains more aids and information such as analysis information, projections, and models. This pitch aims to convince investors to finance the idea being put forward, hence details such as risks, plans to handle it and exact projections should be included.

c. Sales Pitch

This is a business pitch often structured like a presentation focusing solely on the benefits and advantages that the idea has to sell.

d. Product Pitch

This is a business pitch about a new product or service. It features detailed information on the nature of the product or service and reasons why it will succeed in the market. It normally contains information done from research on competitors, market behavior, and several other variables.

14. Compliance And Regulatory Documents 

These are official business records that show that a business is operating in line with the laws of the state and regulations put in place by relevant bodies and is at a standard that is expected of them given the industry they are in. In essence, they demonstrate that a business is running legally and ethically.

a. Licence and Permits

Licenses and permits are issued by the government and appropriate regulation bodies after being sought for and checked to meet the requirements. It shows that a business is allowed to do what they do.

b. Compliance Certificates

These are documents given to businesses by appropriate regulatory bodies to verify that the business is working according to the rules it is governed by. Possession of these documents often shows that the business is credible and trustworthy for its products and services to be trusted by consumers.

c. Data Protection and Privacy Policies

For certain businesses that offer products and services where consumers need to give out information, this document ensures that the business is trustworthy with such information and is bound by law to protect personal data on customers and will be punished by the law if they do not.

d. Environmental Compliance Record

This is a document that shows that a business is environmentally responsible, and its practices do not harm the environment. An environmental compliance Record paints the business in a good light and attracts both investors and consumers to it.

15. Operational Documents

Operational documents contain information and details on the processes and procedures undertaken by businesses. They describe the activities of a business in its entirety, the methodology essentially. With this document, quality can be ensured as well as efficiency.

a. Standard Operating Procedures

This is a step-by-step instruction guide on how certain tasks are performed in a business. They contain diagrams and flowcharts for extra clarity. This document is there to make sure work is consistently good and errors are mitigated.

b. Quality Assurance Manuals

Quality assurance manuals outline the expectation of quality standards and testing procedures for products made or services rendered.

c. Customer Service Protocols

These are guidelines on how customer inquiries, complaints, and services are handled. Not only do they ensure customer issues are addressed but they make sure that it is done in the fastest and most stress-free way possible.

16. Project Management Documents 

These are documents that contain the entire scope of the planning and execution of a project. It includes a time frame of objectives and a plan for it. The purpose of this document is to make sure projects are carried out as smoothly as possible.

a. Project Charter 

This document gives the go-ahead for a project to start with all the details about it written down. It contains information on the project’s purpose and scope.

b. Work Breakdown Structure

This is a document organized in a hierarchical order to show the individual milestones and direction of action for a particular project that is complex.

c. Gantt Chart

Gantt charts visually to show the schedule of a project and all the minute tasks within it.

d. Risk Management Plan 

A risk management plan contains the details of a possible risk that may hinder a project. It also describes the degree of a threat it poses as well as strategies to handle, tackle, or evade these risks.

e. Project Status Report 

Project status reports provide a periodic update on the progress level of a project such as minute tasks that have been completed, milestones reached, and so forth. This allows stakeholders and interested parties to know where things are with a business project.

Electronic Documents or Paper-Based Documents

In today’s day and age technology allows us to have business documents as digital faces on electronic devices as well as printed on paper like it has always been traditionally. However, these two formats fit different business documents for different reasons.

Paper-Based Documents

Paper-based documents have been the traditional format for years. It is what everyone is familiar with. It’s tangible and provisions such as files, folders, cabinets, and drawers have been made for its handling.

Given the fact that electronically powered devices are not required to use it, it makes it very accessible as well as secure. This is because paper documents can only be stolen physically and not hacked in the case of a cyber threat.

Given the long-standing tradition of its use, it is the preferred format of use. Especially in documents that are forms that need to be signed with a signature.

Despite its widespread use, it has its downsides. 

Storing numerous documents can take up a lot of physical space that sometimes can’t be afforded, this problem also arises when documents such as catalogs need to be distributed. Mass production and distribution may not be cost-effective when a wide audience is in question. Paper-based documents have a relatively low ease of access. As retrieval requires physical movement. Physical documents can be scrunched up, torn, and subject to other forms of physical damage.

Electronic Documents 

Technology allows various business documents to exist as digital files to be viewed and used on electronic devices. All the disadvantages of having documents in a physical format aren't experienced when they are in a digital format.

Sharing and storing documents electronically is more efficient in terms of cost and physical space. It’s especially advantageous when the documents are very large, or its distribution is to a wide audience.

Even working with documents electronically is faster and easier to access. Typing is faster than writing and retrieving documents isn’t much of a hassle. 

But along with its efficiency and ease of access comes the added benefit of digital organization of important documents. Files can be saved on different folders and different drives making access even faster.

However, despite all the advantages that using documents digitally offers, there are drawbacks to it as well.

The usage of documents in this way is dependent on technology so in the case of a blackout or internet outage, documents cannot be retrieved. None the less, the benefits of a company switching to digital documents can be huge. It is estimated that an efficient digital document management system can reduce document related loss and expenses by a whopping 75%.

Another thing to keep in mind is that despite its ease of access, usage requires additional skills that not all business personnel may have. Individuals need to be computer literate and familiar with various software and devices to utilize the effectiveness of handling documents digitally. Sometimes this may require additional staff training.

Having documents in an electronic format, especially when it is uploaded and downloaded regularly makes it prone to cyber security issues which could cause breaches, attacks, and sometimes loss of these documents.

No format is better than the other, however, the strengths and weaknesses must be considered depending on the type of business document in use. Luckily both formats are not independent of each other. Paper-based documents can be converted to electronic documents and vice versa. 

The synergy of both formats allows for fewer hitches in hurdles overall.

Enhance Your Business Documents Using Clinked 

Clinked is a cloud-based platform created to make the handling of documents easier and more efficient. It has a centralized cloud storage system that ensures personnel have access to documents relevant to their role in the business.

This allows departments and teams of employees to work together on several documents in real time, providing edits, comments, and feedback simultaneously even when remote.

Documents can be encrypted, and permission selectively granted for sensitive documents. The platform’s security structure protects it from breaches and other security concerns.

Additionally, Clinked offers a convenient and effective downloadable audit trail feature that monitors and logs the activities of all users.

Document versions and edits along with details such as its movement can also be tracked to give further analytical data which the business may find usual.

All these features ensure more cohesive productive collaborations between personnel in your business establishment.

I would also like to highlight Clinked's client portal solution , emphasizing its ease of use and the white-label option. It acts as a one-central hub for all files and documents shared, streamlining document management and enhancing operational efficiency.

Wrapping It Up

Business documents are essential to workplaces. Having said that, documents are not enough to ensure the success and smooth operation of that business. The way it is handled together with the systems in place for its use play a role much larger than many would believe. Paper-based documents have their drawbacks but even the innovative means of using electronic documents do as well. 

With Clinked, innovation is taken to another level as well-known loopholes are addressed. You get to enjoy a safe, seamless application in action with little to no drawbacks.

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BlackRock Retirement Income 2040 Fund

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• NAV as of Nov 13, 2024 $93.63 52 WK: 86.07 - 95.16
• 1 Day NAV Change as of Nov 13, 2024 -0.09 (-0.10%)
• NAV Total Return as of Nov 13, 2024 YTD: 8.10%

Investment Approach

Performance.

• Average Annual
• Calendar Year

Performance is shown after deduction of ongoing charges. Any entry and exit charges are excluded from the calculation.

Portfolio Characteristics

Sustainability characteristics.

To be included in MSCI ESG Fund Ratings, 65% (or 50% for bond funds and money market funds) of the fund’s gross weight must come from securities with ESG coverage by MSCI ESG Research (certain cash positions and other asset types deemed not relevant for ESG analysis by MSCI are removed prior to calculating a fund’s gross weight; the absolute values of short positions are included but treated as uncovered), the fund’s holdings date must be less than one year old, and the fund must have at least ten securities. MSCI Ratings are currently unavailable for this fund.

ESG Integration

Net Expense Ratio excluding Investment Related Expenses is 0.50

• Acquired Fund Fees and Expenses 0.50%
• Interest expense 0.00

Lipper Leader

• Market Value

Exposure Breakdowns

• Asset Class
• Credit Quality

% of Market Value

Portfolio Managers

Michael Pensky, CFA, Managing Director, is a portfolio manager on the Global Tactical Asset Allocation team within BlackRock's Multi-Asset Strategies & Solutions (MASS) group. The GTAA team manages multi-asset macro investment strategies including the  Tactical Opportunities Fund  and  Sustainable Balanced Fund   and custom mandates for institutional clients around the world.

Michael’s service with the firm dates back to 2012. Prior to joining BlackRock, he was a trading desk strategist in Morgan Stanley's Securitized Products Group and worked as a senior analyst in Foreign Exchange Sales & Trading at SunTrust Robinson Humphrey.

Michael earned BS degrees in mathematics and finance from the University of Florida and an MFE degree in financial engineering from the University of California, Berkeley.

Michael’s interests include top-down macro investing and multi-asset portfolio design & management. Outside of work, he enjoys playing musical instruments and running.

Multi-Asset Strategies & Solutions (MASS) meets client demand for active asset allocation strategies and whole portfolio solutions through funds, model portfolios, and more. MASS draws on the toolkit of BlackRock's index, factor, and alpha-seeking capabilities to deliver cutting-edge insights and investment outcomes.

Justin Christofel, CFA, CAIA ,  Managing Director, is co-head of Income Investing for BlackRock’s Multi-Asset Strategies & Solutions group. He is a portfolio manager for a number of income strategies including the Multi-Asset Income Fund , Dynamic High Income Fund , Managed Income Fund , and Multi-Asset Income model portfolios .

Justin’s service with the firm dates back to 2007, where prior to the launch of the Income strategies, he managed customized asset allocation portfolios for institutional investors.

Justin earned his BA, with honors, in economics and mathematics from Yale University.

Justin’s interests include exploring the intersection of macroeconomic drivers and asset class returns and constructing portfolios that offer clients resilience in a variety of market regimes. Outside of work, he enjoys nearly any activity that allows him to be active, particularly Crossfit.

Alex Shingler, CFA ,  Managing Director, is co-head of Income Investing for BlackRock’s Multi-Asset Strategies & Solutions group. He is a portfolio manager for a number of income strategies including the Multi-Asset Income Fund , Dynamic High Income Fund , Managed Income Fund , and Multi-Asset Income model portfolios .

Alex’s service with the firm dates back to 2009, where he joined as a portfolio manager and research analyst within BlackRock’s European and US credit businesses. Alex has spent his career investing across equity and fixed income markets and before joining BlackRock in London, Alex focused on special situation equity investments.

Alex earned his AB, summa cum laude, in philosophy from Princeton University.

Alex grew up in Montreal, Canada, and resides in the New York City area with his wife and daughter.

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Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses, which may be obtained by visiting the iShares ETF and BlackRock Fund prospectus pages. Read the prospectus carefully before investing. Investing involves risk, including possible loss of principal. The Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”). ©2020 BlackRock, Inc. All rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, BUILD ON BLACKROCK, ALADDIN, iSHARES, iBONDS, iTHINKING, iSHARES CONNECT, FUND FRENZY, LIFEPATH, SO WHAT DO I DO WITH MY MONEY, INVESTING FOR A NEW WORLD, BUILT FOR THESE TIMES, the iShares Core Graphic, CoRI and the CoRI logo are registered and unregistered trademarks of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. All other marks are the property of their respective owners. USR-9694

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Important Information

Review the MSCI methodology behind the Sustainability Characteristics and Business Involvement metrics: 1 ESG Fund Ratings ; 2 Index Carbon Footprint Metrics ; 3 Business Involvement Screening Research ; 4 ESG Screened Index Methodology ; 5 ESG Controversies ; 6 MSCI Implied Temperature Rise

For funds with an investment objective that include the integration of ESG criteria, there may be corporate actions or other situations that may cause the fund or index to passively hold securities that may not comply with ESG criteria. Please refer to the fund’s prospectus for more information. The screening applied by the fund's index provider may include revenue thresholds set by the index provider. The information displayed on this website may not include all of the screens that apply to the relevant index or the relevant fund. These screens are described in more detail in the fund’s prospectus, other fund documents, and the relevant index methodology document.

Certain information contained herein (the “Information”) has been provided by MSCI ESG Research LLC, a RIA under the Investment Advisers Act of 1940, and may include data from its affiliates (including MSCI Inc. and its subsidiaries (“MSCI”)), or third party suppliers (each an “Information Provider”), and it may not be reproduced or redisseminated in whole or in part without prior written permission. The Information has not been submitted to, nor received approval from, the US SEC or any other regulatory body. The Information may not be used to create any derivative works, or in connection with, nor does it constitute, an offer to buy or sell, or a promotion or recommendation of, any security, financial instrument or product or trading strategy, nor should it be taken as an indication or guarantee of any future performance, analysis, forecast or prediction. Some funds may be based on or linked to MSCI indexes, and MSCI may be compensated based on the fund’s assets under management or other measures. MSCI has established an information barrier between equity index research and certain Information. None of the Information in and of itself can be used to determine which securities to buy or sell or when to buy or sell them. The Information is provided “as is” and the user of the Information assumes the entire risk of any use it may make or permit to be made of the Information. Neither MSCI ESG Research nor any Information Party makes any representations or express or implied warranties (which are expressly disclaimed), nor shall they incur liability for any errors or omissions in the Information, or for any damages related thereto. The foregoing shall not exclude or limit any liability that may not by applicable law be excluded or limited.

Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses, which may be obtained by visiting the iShares Fund and BlackRock Fund prospectus pages. Read the prospectus carefully before investing.

Because the Fund follows a decumulation strategy and its distributions may consist of return of capital, it may not be appropriate for an investor who does not want his or her principal investment in the Fund to decrease over time or who does not wish to receive return of capital. To achieve decumulation and to maintain monthly distributions, the Fund’s distributions will generally exceed the Fund’s income and gains for the Fund’s taxable year. Distributions in excess of the Fund’s current and accumulated earnings and profits will be treated as a return of capital. The Fund uses a proprietary distribution algorithm to seek to maximize monthly distributions while decumulating the Fund’s assets to a predefined ending net asset value per share, as a percentage of the Fund’s net asset value per share at inception (the “Target Percentage”), over the term of the Fund. Although the Fund seeks to decumulate the Fund’s assets to a Target Percentage over the term of the Fund, the Fund may not be successful in achieving this objective. The return of the Target Percentage is not an express or implied obligation of the Fund. There can be no assurance that the Fund will be able to return any specific Target Percentage, and such return is not backed or otherwise guaranteed by BlackRock or any other entity. Depending upon a variety of factors, including the performance of the Fund’s portfolio over the life of the Fund and the Fund’s intention to provide monthly distributions during the term that may include return of capital, the amount distributed to shareholders at liquidation may be significantly less than the Fund’s Target Percentage. There can be no assurance that the Fund will be able to make a distribution in any particular month over the term of the Fund. The Fund does not have an automatic dividend reinvestment plan, and dividends and distributions cannot be automatically reinvested in shares of the applicable Fund..

Certain information provided for the Fund, including the ESG integration disclosure, may relate to, or otherwise include information of, the underlying fund in which the Fund invests substantially all of its assets. The fund is actively managed and its characteristics will vary. Stock and bond values fluctuate in price so the value of your investment can go down depending on market conditions. Fund of funds are subject to the risks associated with the underlying BlackRock funds in which it invests. International investing involves special risks including, but not limited to currency fluctuations, illiquidity and volatility. These risks may be heightened for investments in emerging markets. Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. Non-investment-grade debt securities (high-yield/junk bonds) may be subject to greater market fluctuations, risk of default or loss of income and principal than higher rated securities. Asset allocation strategies do not assure profit and do not protect against loss. The fund may use derivatives to hedge its investments or to seek to enhance returns. Derivatives entail risks relating to liquidity, leverage and credit that may reduce returns and increase volatility.

Investing involves risk, including possible loss of principal.

The Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).

Although BlackRock shall obtain data from sources that BlackRock considers reliable, all data contained herein is provided “as is” and BlackRock makes no representation or warranty of any kind, either express or implied, with respect to such data, the timeliness thereof, the results to be obtained by the use thereof or any other matter. BlackRock expressly disclaims any and all implied warranties, including without limitation, warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose.

BlackRock provides compensation in connection with obtaining or using third-party ratings and rankings.

© 2024 BlackRock, Inc. BLACKROCK, BLACKROCK SOLUTIONS, BUILD ON BLACKROCK, ALADDIN, iSHARES, iBONDS, FACTORSELECT, iTHINKING, iSHARES CONNECT, FUND FRENZY, LIFEPATH, SO WHAT DO I DO WITH MY MONEY, INVESTING FOR A NEW WORLD, BUILT FOR THESE TIMES, the iShares Core Graphic, CoRI and the CoRI logo are trademarks of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. All other marks are the property of their respective owners.

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