NSBDC – Writing a Business Plan
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UNR - UNLV
Reno - Las Vegas - Henderson - Carson City - Elko - Ely - Fallon - Gardnerville - Pahrump - Winnemucca
Three-Year Projected Income Statement Pro-forma
This is the twelve-month Pro-forma projected in annual figures over three years, with
plans for expansion or growth factored in.
For years two and three you will need the following estimates:
y Percentage of Sales Growth.
y Percentage of Other Sales Growth.
y Change in Cost of Goods Sold percentage (if any).
y Percentage increase of Selling and Operating Expenses that you will have
to absorb (if any).
To calculate the expenses during the two and three year pro-forma, simply take the
percentage of sales amount for each expense and multiply it by the projected growth
of your sales
Example:
If in year 1 you project to have $10,000 in sales and your telephone bill is estimated
to be 1% of sales, then your phone bill for year one would be $100 =[10,000 X .01].
In year two you are expecting 10% growth over Year 1, so your new sales forecast
would be $11,000=[(10,000 X .1) + 10,000]. If you project your telephone bill to
be 1% of sales for year 2, then your projected bill would be $110 =[110,000 X .01].
Balance Sheet
A balance sheet is a form reflecting your business’ condition as of a particular date.
A Balance Sheet is a form listing:
y assets (anything that will give future value to your business)
y liabilities (anything that will cause future costs to your business), and
y owner’s equity (the difference between assets and liabilities, or what you
have less what you owe).
To give an example, if your business purchased a new automobile costing $10,000
with $2,000 down and financed the rest, you would create:
Assets of $10,000 (the automobile)
Liability of $8,000 (the loan)
Owner’s Equity of $2,000 (the difference).
Notice how everything stays in "Balance" (i.e., Assets = Liabilities + Owners Equity).
Hence the term "Balance Sheet." If you are currently in business, you will want to
include a copy of your current balance sheet. Individuals will need to include a
personal balance sheet.
(Budget enough working capital to ensure your business maintains a positive cash
flow and does not run out of funds.)
A balance sheet is a form reflecting the condition as of a particular date. Fill out this
balance sheet projected for the day you open your business (pro forma). Your
particular business may require additional categories, and some of those listed below
may not apply to you. Adjust your Balance Sheet accordingly.