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Financial History & Analysis – Creating a Business Plan

by Scott Jones | September 14, 2023

Creating a Business Plan – Financial History & Analysis

We just looked at your personal financial statement. Now, in the next section of your plan, you need to include your financial history & analysis. Here you’ll show that your business is profitable, how you’re currently financed, and plans for future growth. Because this data might be complicated, it may be helpful to enlist a qualified financial professional to help you.

Many elements can be used to illustrate the overall financial health of your business. Here are the three financial statements that you should include:

Balance Sheet

This breaks down the net worth of your business. You should break this down by month with a final net worth at the end of the year. A balance sheet features three different components:

  • Business Assets
    • Cash
    • Real estate
    • Inventory
    • Equipment
    • Accounts receivable
  • Business Liabilities
    • Loan debts
    • Accounts payable

The final component is your equity, which is the total amount of your assets minus your liabilities.

Income Statement

Also known as a profit/loss statement (or P&L), this is where you show the profitability of your business. Show the revenue, expenses, and the resulting profit or loss for a fiscal year for each month.

Cash Flow Statements

Here, you’ll show the reader how much money is flowing in and out of your business each month. As an already-operating business, you’ll need to provide examples of past months’ cash flow with actual numbers. To create a cash flow statement, start with the previous month’s balance, add your revenues, and subtract disbursements. This final number becomes the starting balance for the next month.

While not required, the following financial documents can further shore up this section of your business plan:

  • Employee plan — Current number of staff and how much you’re paying them. Include any potential plans for hiring and how much that may cost, including any training you may need to provide.
  • Financial history — A quick summary of your business’s finances from the start of operation until the present time.
  • Sales forecast — Based on previous growth and your plans moving forward, considering market trends and predictions.

Once you have the foundation of this information in place, update it monthly. We recommend incorporating visuals, where possible, as this will make it easier and more interesting to read. There you have it, your financial history & analysis.

Next up: we’ll round out this series with a look at how to put together your executive summary


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Scott Jones

Scott Jones is Vice President, Senior Relationship Manager at Regions | EnerBank. For over ten years, he's focused on helping home improvement contractors sell more projects and make more money. He's worked with hundreds of contractors of various sizes, from $500,000 to $150 million in annual revenue. Before joining EnerBank, Scott spent several years in management roles, including with Pella Windows.