Financial Forecast Template

Convince investors with your 5-year financial forecast

Financial Forecast Template

Convince investors with your 5-year financial forecast

financial forecast template

When starting a business, getting your financial forecast right is key to your success. Investors and banks will want to see realistic financial projections of your business. Prove to them that you can give a good return on their investment by creating a solid 5-year financial projection. 

Making your business’s financial forecast as detailed as possible will reassure investors that their money is in safe hands. This will also help them justify taking a risk on you and your business. Use our 5-year financial projection template and calculator to generate your monthly and annual revenue, expenditure and net profit figures, as well as an annual EBITDA for your first five years of trading.

What is financial projection?

Financial projection refers to the predicted and expected revenues, expenses and cash flows of a business over a particular period of time. These financial forecasts are based on internal and external data, including historical financial statements, current industry trends and more. 

Financial projections often consider different financial scenarios, such as lower sales or higher operating expenses, to calculate how this might affect your profitability.

What are financial projections in a business plan?

While financial forecasts can be used internally for budget purposes, they also form a crucial part of your business plan when convincing investors to support your business. 

Investors will want to see these figures as part of your business plan which is why it’s so important to ensure you have realistic financial projections that are based on existing data and evidence. 

How to calculate financial projections

Our financial projections template and calculator considers several essential financial factors across a 5-year period, including:

  • Customer Costs
  • Revenue
  • Expenditure
  • Direct Costs
  • Staff Wages
  • Staff Costs
  • R&D
  • Marketing Costs
  • Admin Expenses
  • Finance and Banking
  • Office Costs
  • Legal and Accountancy Fees
  • Travel and Sustenance 
  • Contingency Considerations

Taking into account the financial factors above, our free 5-year financial forecasting template is broken down into the following crucial sections:

  • 5 Year Summary
  • Assumptions
  • Cash Flow
  • Balance Sheet

Why are financial projections important?

Financial projections are vital to any business and can be an invaluable tool for internal and external purposes. They can help you accurately monitor your finances so you can identify any potential financial issues and help you plan for growth. 

Financial forecasts also form a crucial part of your business plan when pitching to obtain funding from investors and banks alike. They also allow you to plan your budget and set benchmarks for achieving financial goals and objectives.

How to make financial projections

While our template can act as a good guide, you are ultimately responsible for putting together realistic financial projections that investors can trust. This is why you should always use data and evidence to support your financial forecasts to avoid providing figures that an investor may deem to be overly optimistic or unrealistic. To help you create credible financial projections, here are a few tips:

1. Gather historical financial data & external figures

One of the most essential steps to forecasting your financials includes gathering and analysing your financial statements and historical data. According to Forbes, the strength and depth of your data is one of the strongest factors affecting the amount of funding a business receives. This is why it’s so important to gather as much reliable and credible data as possible. 

If your business is already up and running and you’re seeking investor support for growth purposes, you should use the following financial data to forecast your finances:

  • Comprehensive income 
  • Earnings per share 
  • Equity 
  • Expenditures 
  • Fixed costs
  • Investments 
  • Losses 
  • Liabilities 
  • Revenue 

If however, your business is at the beginning of the planning and pitching phase, and you don’t have these figures, you should use external data to help you calculate financial projections. Refer to reliable and credible industry and market data to produce realistic results and increase your chances of gaining investor support. 

2. Map out your 5-year forecast with key assets

Once you have the data, it’s important to carefully plan out your 5-year forecast with all of the essential assets that you’ll need to convince investors that your business is one to back. The following four assets are crucial to creating financial projections: 

  • Profit and loss forecast
  • Cashflow summary
  • Balance sheet
  • Key financial metrics

3. Create your profit and loss forecast

A major part of financial projections is calculating your profit and loss forecast. Profit and loss forecasts include revenue, cost of sale and operational costs. These figures will show your company’s expected profitability and the predicted expenditure you’ll incur. 

4. Assemble your cashflow summary

Your cashflow summary is a vital document that records the net amount of cash moving in and out of your business. It’s critical to show investors that you have a complete understanding of your company’s cash flow and that you can manage it seamlessly. Showing that you have a positive cash flow is just as important, which is why your cash flow summary plays a crucial role in your final financial projections.

5. Compile your balance sheet

Another critical asset that you’ll need to help you calculate your financial projections is your business’s balance sheet. A balance sheet is a financial statement that provides an overview of your company’s current assets, liabilities, and shareholder equity. Having your balance sheet ready for review will give investors a good idea of the value of their equity.

6. Add key metrics

Adding a financial summary consisting of key metrics will make investors’ lives that much easier – and they’ll love you for it. The following financial metrics will give investors insight into your business’s projected performance: 

  • Annual Recurring Revenue (ARR)
  • Burn Rate
  • Customer Acquisition Cost (CAC)
  • Customer Churn
  • Gross Profit
  • Lifetime Value (LTV)
  • Margin

For more detailed information about how to make 5-year financial projections, see our guide to preparing financial projections for investors.

financial forecast template

Download our financial projection template

If you’re ready to start preparing your financial projections, allow us to help. Robot Mascot’s financial projections for startups template is available to download as an Excel spreadsheet and includes a tab for each year of the forecast. It operates as a calculator, featuring a 5-year summary which populates automatically from the yearly forecast tabs. 

Our downloadable financial projection template and calculator is designed for UK startups and entrepreneurs to help convince investors that your business idea is one-to-back. Our template considers five key financial assets that will help you build a realistic and formidable financial projection document, including:

  • Profit and loss (P&L)
  • Cashflow
  • Balance sheet
  • Key metrics
  • Financial Commentary

To forecast your financial projections and win investor support, download our 5-Year Financial Projection template and calculator for free. 

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