Cash Flow - Business Plan Forecast Template

How to Create 5-Year Financial Projections with Our Business Plan Cash Flow Forecast Template

Robust financial projections are the backbone of any credible business plan. Our Excel-based cash flow forecast template is designed to help you build clear, lender-ready, 5-year projections fast. This guide explains the workflow, the key sheets and practical tips so you can move from assumptions to a polished forecast that aligns with your strategy and funding goals.

What’s in the template

• Assumptions — enter drivers for revenue, costs, tax, working capital and funding. Also enter balance sheet opening balances if the forecast is for an existing business.
• Income Statement — monthly and annual profitability over the 5-year horizon.
• Balance Sheet — assets, liabilities and equity that represent projected activity.
• Cash Flow Statement — direct view of operating, investing and financing cash flow.

Before you start: gather the right inputs

• Revenue drivers (units, prices, seasonality, ramp-up timing).
• Direct costs (COGS), profit margins and operating expenses.
• Capital expenditure (equipment, fit-out), depreciation method and asset lifetime.
• Tax rate, payment timing and any allowable reliefs.
• Working capital terms (days to collect/pay, inventory days).
• Funding plan (equity injections, loans, interest rates, repayment profile).

Step-by-step: build your 5-year forecast

1. Set start date and note timeframes - set the start date on the Assumptions sheet and note the monthly and annual timeframes. Most of the monthly data should be entered in the user input rows on the income statement and cash flow statement and the subsequent annual periods are calculated mostly based on the year 2 to 5 values set on the Assumptions sheet.
2. Enter monthly revenue amounts - the template uses revenue amounts and gross margin percentages to calculate turnover, cost of sales and gross profits. If volumes, pricing, and any seasonality or launch ramp need to be used to calculate revenue, include a separate sheet and link the appropriate amounts into our existing sheet. Use separate lines for key products/services to keep projections auditable.
3. Enter gross margins - gross profits are determine based on the gross profit percentages specified with cost of sales and gross profit calculated automatically.
4. Add turnover growth - year 2 to 5 revenue amounts are calculated based on the turnover growth specified on the Assumptions sheet.
5. Enter operating expenses - add your monthly operating expenses by entering the amounts on the income statement. You can edit existing expense items to fit your business and add new rows for additional expense items. Year 2 to 5 expenses are determined based on the expense inflation rate specified on the Assumptions sheet.
6. Add capex & depreciation - add monthly capex and depreciation amounts based on asset lists and useful lives of assets which need to be calculated independently from the template. Year 2 to 5 amounts are calculated based on the amounts entered on the Assumptions sheet.
7. Define working capital - set inventory days, debtors days and creditors days on the Assumptions sheet. These drive timing differences that shape cash flow.
8. Configure sales tax and income tax - all tax amounts are automatically calculated based on the settings specified on the Assumptions sheet.
9. Model financing - the template includes separate sheets for loans and loan terms can be specified on the Assumptions sheet. The template rolls these into financing cash flow.
10. Review statements - check the income statement, balance sheet and cash flow statement for monthly and annual totals across all 5 years.
11. Validate & iterate - use the built-in checks to confirm the model balances; refine assumptions until the projection reflects your plan.

Translating profit into cash: the essentials

A common surprise in financial projections is that profit and cash flow diverge. The template explicitly bridges this gap: working capital absorbs cash as sales grow; capex creates assets but not immediate expenses; and loan movements are cash items that don’t impact profit. Reviewing the monthly cash flow helps you spot crunch points and plan funding buffers.

Scenario planning and sensitivities

• Best/Base/Worst: duplicate your file and flex key levers—price ±5–10%, volumes ±10–20%, working capital days shifts, capex timing.
• Breakeven: test the sales level at which profit turns positive and when cumulative cash flow becomes positive.
• Funding runway: identify the lowest monthly cash point and size your funding facility accordingly.

Presenting your projections in a business plan

• Summarize the 5-year headline metrics: revenue, gross margin, EBITDA, and ending cash.
• Include a simple analysis for monthly net cash flow and closing balance over the first 12 months.
• Explain key assumptions in plain language (pricing logic, ramp-up, major cost drivers).
• Highlight risk mitigations (e.g., flexible cost lines, alternative suppliers, phased hiring).
• Attach the Excel file as an appendix for diligence and transparency.

Quality checks before you share

• Balance sheet balances each month; this should automatically be the case with our template but if you extended the structure, you may need to double check that all additions were done as per the template instructions.
• Revenue and cost timing match operational reality.
• Working capital terms reflect actual customer and supplier agreements.
• Debt schedules: interest and principal mirror your facility agreement.
• Tax logic: effective rates and payment timing align with your jurisdiction.

Common modelling mistakes (and quick fixes)

• Linear growth everywhere: use staged ramp-ups and seasonality where relevant.
• Ignoring VAT/GST timing: if applicable, reflect collection and payment timing in cash flow.
• Static working capital: tie receivables, payables, and inventory to sales and cost drivers.
• Capex without maintenance: include replacement cycles beyond year 3–4.
• No downside case: present at least one conservative scenario for stakeholders.

Tips to keep your forecast credible

• Anchor assumptions to benchmarks (quotes, market data, pilot results).
• Explain any step-changes (new location, channel launch, major contract).
• Prioritize monthly detail in years 1; annual summaries suffice for years 2–5.
• Document sources inside the Assumptions sheet for future updates.

Exporting and sharing

• Use the template’s print-friendly views to export PDFs for your business plan pack.
• Lock assumption cells or share a read-only copy when circulating drafts.
• Keep a dated archive of key versions (Base v1, v2, etc.) for decision audit trails.

FAQ

• What if I have multiple products? Add separate lines for each, with unique volume and profit percentages as explained in the template instructions.
• How do loans work? Enter loan terms on the Assumptions sheet. Opening loan balances form part of the balance sheet opening balances section and additional loans can be added to the loan amortization sheets. Capital repayments and monthly interest amounts are automatically calculated and included on the cash flow statement and income statement.
• Does it reconcile? Built-in checks help ensure the three statements stay consistent as you refine assumptions.
• What if the forecast is for an existing business? Add your opening balance sheet balances as at the start of the forecast period to the appropriate section on the Assumptions sheet and make sure that the total of all opening balances comes to a zero amount as is the norm with all trial balances.