The Business Planning Institute, LLC

Pro Forma Financials

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Financial Models

When investors are asked what they consider to be the most common weakness of most business plans (even those done professionally), they will invariably point to two key areas, the executive summary and pro forma financial statements.

Compounding the difficulty for most budding entrepreneurs is the fact that a large percentage of investors either have a financial background or they have individuals on staff who are experts at analyzing financial statements. If there's a weakness in your pro formas, it won't go unnoticed and poorly constructed or incomplete financial data is a clear indication that you haven't put the necessary effort into your business plan .

Another common problem with most pro forma models is the "one size fits all" syndrome. Every business is unique and the design of the pro forma financial model should reflect these differences. To accommodate the various types of business models (manufacturing, service provider, licensing, retail, e-commerce, distribution, etc.) vFinance has developed nine different pro forma models that allow us to tailor your financial statement to your specific type of business. No other company even remotely offers this degree of flexibility and each of our models is designed to withstand the scrutiny of the most demanding investors.

So what do investors want and look for in pro formas financial statement? Every BPI model includes:

 
  • Five-year Income statement
 
  • Five-year Cash flow analysis
 
  • Five-year Balance sheet
 
  • Detailed Financial assumptions
 
  • Five-year Financial summary
 
  • Statements by month
 
  • Cash flow budget

One of many unique features of our financial models is that we provide a very useful and interactive "financial assumptions" input analysis. The shaded areas shown in the "Financial Assumptions" section of the attached are all variables that can be changed by the end user. Any change in any these variables automatically repopulates the entire model including the income statement, cash flow analysis, balance sheet and the summary data.

The advantage of this feature is that it allows your business plan to become a dynamic document. You can change a variable (revenue, COGS, expenses) and you'll know immediately what impact that change will have on your income statement. This unique feature provides a valuable and useful tool for financial modeling or "what if" analysis. If your considering an increase in your sales and marketing expenses, for example, you could very quickly and easily plug in new revenue and expense numbers and you would know immediately how the impact the bottom line.

We encourage you to review the attached model and compare it to other models that are available from other companies. Once you've made this comparison, we think you'll see why vFinance is the undisputed leader in this industry.


The Business Planning Institute, LLC
580 Village Boulevard
West Palm Beach, Florida 33409
Suite 150
561-236-5533 (Office Phone)
561-689-5546 (Fax)
Info@bpiplans.com

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