Financial Projection is needed by the startups to getting the funds from angel investor or VC Firms. so they are always looking for professionals like Chartered Accountants in India who’s have great knowledge about the Financial statements. so today we disused about
Financial Projection For Startup Business in India
So first of all lets understanding about the difference between a Financial Projection Statement and Accounting Statements :-
However, you need to keep in mind that the financial statement is not the same as an accounting statement. Granted, a financial statement includes financial projections such as profit and loss, balance sheets, and cash flow, all of which makes it look similar to an accounting statement.
But the major difference between them is that an accounting statement deals with the past, while the financial projections statement of your business plan outlines your future spending and earnings. Having made this point clear, let’s now look at the steps involved on preparing a financial statement for your business plan.
So Basically in India for a Startup Business you need followings 3 things to make best financial projections –
- Income Statement
- Balance Sheet
- Cash-Flow Statement
Hope you understand and familiar with above terms if you are ready to prepare Financial Projections –
6 Steps for Preparing Financial Projections for Startup Business in India
Step 1 – Start by preparing a revenue forecast and a forecast profit and loss statement. Also, prepare supporting schedules with detailed information about your projected personnel and marketing costs. If your business has few fixed assets or it’s just a cash business without significant receivables, you don’t need a forecast balance sheet.
Step 2 – Using your planned revenue model, prepare a spreadsheet. Set the key variables in such a way that they can be easily changed as your calculations chain through. To ensure that your projected revenues are realistic and attainable, run your draft through a number of iterations. For each year covered in your business plan, prepare a monthly forecast of revenues and spending.
Step 3 – If you plan to sell any goods, then include a forecast of goods sold. This applies the most to manufacturing businesses. Give a reasonable estimate for this cost. And be of the assumption that the efficiency of your products would increase with time and the cost of goods sold as a percentage of sales will decline.
Step 4 – Quantify your marketing plan. Look at each marketing strategy you outlined in the business plan and attach specific costs to each of them. That is, if you are looking at billboard advertising, TV advertising, and online marketing methods such as pay-per-click advertising and so on; then you should estimate the cost of each medium and have it documented.
Step 5 – Forecast the cost of running the business, including general and administrative costs. Also, forecast the cost of utilities, rents, and other recurring costs. Don’t leave out any category of expenses that is required to run your business. And don’t forget the cost of professional services such as accounting and legal services.
Step 6 – In the form of a spreadsheet, forecast the payroll that outlines each individual that you plan to hire, the month they will start work, and their salary. Also include the percentage salary increases (due to increased cost of living and as reward for exemplary performance) that will come in the second and subsequent years of the forecast.
Hope this Article is helpful for you. if you are not familiar with above all the terms then we recommend to hire a Good Legal Professionals or experts because its all about the assumption and other things so you can hire a Good Chartered Accountant in India. we recommend a website myonlineca which is on demand legal services at your fingertips. its provide you good professional in your city or else you can done your work online also via many Legal Experts with Comparable Pricing and Reviews, Ratings.
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