As you progress with your business idea, you will want estimate costs and prepare a Financial Forecast for the next several years. What are your monthly revenues and where do they come from? What expenses do you expect to pay each month? Have you considered the cost of an office? Supplies? Legal services? Shipping? Salaries? Raw materials? Before proceeding with your idea, you will want to make sure you will have enough revenue to cover your basic expenses. Too many businesses fail to open or close quickly because they have underestimated costs. The overall yearly costs and revenue is shown on the Projected Income tab. You will need to attach a Financial Forecast to all funding and grant applications. This document will need to be updated regularly to align with any cost or revenue changes.

To help you with your first draft, please refer to the attached spreadsheet. This document contains generic revenue streams and expenses. Customize the costs and revenue items to your business.

Do not forget hidden costs, payment processing costs or costs related to employment such as WSIB, EI premiums and any other remittances.

Assignment: Draft your projected financial statements for the next 3 years.

Draft Financial Forecast Spreadsheet (downloadable)