The financials of your business plan

What belongs in the financial section

The financial section translates your plan into numbers. Where the written part explains what you intend to do, the financials show whether it adds up. It is made up of five plans:

Revenue plan: built from the bottom up as price times quantity for each product or service, with growth and seasonality, not as a flat top-down growth rate.
Cost plan: variable costs such as materials and cost of goods, staff by role including payroll overhead, and fixed costs such as rent, marketing and IT.
Profitability forecast (projected P&L): revenue down to net income across three to five years.
Cash flow plan: month by month in the first year, including taxes, investments and debt service, so the account never slips into the red.
Investment and funding-requirement plan: purchases, start-up costs and working capital build-up, covered by equity, grants and loans. Use of funds and sources of funds have to match.

The mechanics behind it: how the P&L, cash flow and balance sheet connect

A good financial section is not a stack of separate tables but a model of three linked statements. The projected P&L shows performance, the cash flow statement shows the real movement of money, and the projected balance sheet shows the stock of assets and capital.

They connect by necessity: revenue and costs produce the result in the P&L. That result flows into cash flow, adjusted for non-cash items such as depreciation and for changes in working capital. Cash flow and result in turn change the balance sheet, meaning equity, cash and debt. In the end the balance sheet has to hold: assets equal liabilities and equity. This balance check is the proof that the whole plan is internally consistent.

This linking is exactly the demanding part. In a spreadsheet you build yourself, the three statements hang on hundreds of formulas across several sheets, and they easily drift apart as soon as one assumption changes.

P&L, cash flow and balance sheet linked automatically

Planvik walks you through every plan and links the P&L, cash flow and projected balance sheet automatically. Change one assumption and the whole model recalculates, with the balance sheet holding by construction. Finished as a bank-ready Excel file with key figures and repayment schedules.

Build your financial plan

Unit economics: does a single unit pay off?

Before you scale a business model, a single unit should already pay off, whether a bank, an investor or you are the one looking at it. That is what unit economics show, and they are the difference between raw revenue growth and a viable model:

Contribution margin per unit: price minus variable costs. Does each unit sold leave something behind to cover the fixed costs?
Break-even: the volume at which the total fixed costs are covered and the plan turns into the profit zone.
Acquisition cost versus customer value: the CAC (customer acquisition cost) is what winning a new customer costs. The CLV (customer lifetime value) is what that customer brings in over the entire relationship. Customer value should sit well above acquisition cost.

How detailed it has to be

The level of detail required depends less on the individual institution than on the audience and the size of the plan. Banks mostly review by the same scheme, an investor looks harder at growth and unit economics, a grant body at the proof of how funds are used. As a rule of thumb:

Three to five years of planning, the first year month by month, the following years annually.
Every assumption backed up, with quotes, order backlog or market data. A growth figure with no rationale gets questioned immediately.
A base and a worst case show that you stay solvent even if things go worse than planned. Scenarios are not mandatory, but they are convincing.

The key figures should be readable directly at the end. How to calculate them and what values banks expect is covered in the guides on DSCR, equity ratio and EBITDA.

Common mistakes

Forgetting the founder's salary or personal drawings. Your own living costs have to be funded from the plan too.
Ignoring working capital. Building up receivables and inventory ties up money that then goes missing.
Revenue too optimistic and unsupported. Lenders and investors recalculate conservatively.
The parts do not fit together. The P&L, cash flow and balance sheet are built separately and drift apart: the balance sheet does not hold, or one figure appears differently on two sheets. In nested formulas that have grown over years, this happens fast and costs trust.
The numbers contradict the text. If the text says 30 percent growth and the table says 10, the whole plan loses credibility.

Frequently asked questions

How many years does the financial section cover?

Three years is common, and often five for KfW-style programmes. The first year is planned month by month.

Does the financial section need a projected balance sheet?

For a loan application, usually yes. For pure grant applications, a projected P&L and cash flow plan are sometimes enough.

What is the difference between a financial plan and the financial section?

The financial section is the chapter inside the business plan. The financial plan refers to the number work itself. In practice the terms are often used interchangeably.

Do I have to run scenarios?

It is not strictly required. A base and a worst case do show, however, that you stay solvent even if things go worse than planned.