From the course: The 45-Minute Business Plan

Projected profit and loss

From the course: The 45-Minute Business Plan

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Projected profit and loss

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- Projected profit and loss. Your opening statement is a general description, so it can be brief. You might say something like this. The following profit and loss table and charts illustrate the total effect of revenue generation, direct cost of sales, operating expenses, and profitability for ABC LLC over the projected period. The following assumptions were made when preparing the profit and loss table in the first 12-month breakdown in the appendix found at the end of the business plan. So, what do you need to highlight? Here are some categories you'll want to expand on. Again, these are just examples we have used. Your plan may require more or less, depending on your approach. I like to use assumptions, payroll taxes, rents or mortgages, inflation or reduction of expenses, depreciation of assets, EBITDA, or earnings before interest, taxes, depreciation, and amortization, interest expenses, and taxes incurred. Once you have written statements for each of these categories, you'll want to create a three-year profit and loss statement table, like the example in your handouts, and also shown here on the screen. Now we can see an itemized list of sales and expenses, as well as net profit percentages. At a glance, the investors should be able to get a general idea of what their investment will look like over the next three years.

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