How to Create Financial Projections for Your Business Plan (Without an MBA)

Don’t have a finance degree? No problem. Learn how to create simple but solid financial projections for your business plan - including sales forecasts, expense estimates, cash flow, and breakeven analysis - step-by-step.

Let’s be honest - when you hear “financial projections,” your brain might scream, “I didn’t sign up for this!” But here’s the truth: you don’t need an MBA or a finance background to build clear, useful financial projections for your business plan.

All you need is a basic understanding of your business, a spreadsheet (or even paper), and this guide. We’ll walk you through sales forecasts, expense estimates, cash flow planning, and breakeven analysis in simple, no-fluff language.

Whether you’re starting a food truck, freelancing full-time, or launching a SaaS app, financial projections help you make smarter decisions, attract investors, and plan for success.

Why Financial Projections Matter

Financial projections are like a GPS for your business - they show where you’re headed, how much gas (aka cash) you’ll need, and when you might hit bumps or break even.

They also:

• Help you plan for growth
• Prove your business is viable
• Make you look serious to investors and lenders
• Help you spot problems before they become disasters

Even if your numbers aren’t perfect, clear and thoughtful projections show you’ve done your homework.

Step 1: Create a Sales Forecast

This is your best guess of how much you’ll sell in the next 12 months (or 3–5 years, if you're building a long-term plan).

How to do it:

1. List your revenue streams (e.g., product sales, subscriptions, consulting fees)
2. Estimate units sold per month × price per unit
3. Adjust for seasonality if your business fluctuates throughout the year

Example:

You run an online bakery.

• You sell 300 cupcakes/month at $3 each = $900/month
• You also sell 20 birthday cakes at $40 each = $800/month
• Total forecasted monthly sales = $1,700
• Multiply by 12 months = $20,400 annual sales forecast

Tip: Start small and scale up gradually. Most investors prefer a conservative but well-thought-out forecast.

Step 2: Estimate Your Business Expenses

This is where you figure out what it costs to run your business.

Split your expenses into:

1. Fixed Costs: Stay the same each month

• Rent
• Salaries
• Insurance
• Software subscriptions

2. Variable Costs: Change based on sales or production

• Raw materials
• Packaging
• Shipping
• Contractor fees

3. One-Time Startup Costs:

• Equipment
• Website development
• Licenses or permits

Example:

Expense Monthly Cost

Rent $500
Ingredients & Supplies $600
Marketing $200
Insurance $100
Total Monthly Expenses $1,400

Then multiply by 12 to get annual operating expenses.

Step 3: Build a Simple Cash Flow Projection

Cash flow is different from profit. You can be profitable on paper but run out of cash if customers pay late or bills pile up at once.

Here’s how to project cash flow:

1. Start with your opening cash balance
2. Add cash coming in (monthly sales)
3. Subtract cash going out (expenses, purchases, taxes)
4. See how much cash is left at the end of each month

Goal: Stay positive. If cash flow dips, you may need to raise prices, cut costs, or get short-term funding.

Tool Tip: Use a spreadsheet or free templates from sites like SCORE or Shopify to map this monthly.

Step 4: Perform a Breakeven Analysis

Your breakeven point is when your total revenue = total expenses. In other words, when you’re no longer losing money.

Formula:

Breakeven Sales = Fixed Costs ÷ (Price – Variable Cost per Unit)

Example:

• Cupcake price = $3
• Variable cost per cupcake = $1
• Fixed costs = $1,200/month

Breakeven units = $1,200 ÷ ($3 – $1) = 600 cupcakes/month

Meaning: You need to sell 600 cupcakes/month to cover all costs and start profiting on the 601st.

Step 5: Create Simple Financial Statements

For a business plan, include 3 basic reports (projected over 1–3 years):

1. Profit & Loss Statement (P&L)

Shows revenue – expenses = net profit

Use your sales and expense estimates to build this.

2. Cash Flow Statement

Shows when money enters and leaves your business.

3. Balance Sheet (Optional for Beginners)

Shows what your business owns (assets), owes (liabilities), and equity.

Tip: Don’t panic if this feels overwhelming. Tools like LivePlan, Excel templates, or even working with a freelance accountant can help you get it right.

You don’t need to be a financial whiz to create projections that work. The key is to be realistic, thoughtful, and adaptable.

Investors and lenders don’t expect perfection - they want to see that you understand your numbers, your business model, and your growth path.

Start small, update regularly, and remember: your financials tell the story of your business in numbers.