Finance Wizard, Income Statement Generator for New Business Ideas

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You decided to start a new business and there is a ton of things to do. Once the idea is clear and you know exactly the WHAT and WHY, you need to create a solid Business Plan which includes your market research and finances among other things. You're passionate about your business idea but you're not a financial/accounting expert.

The Finance Wizard (FW) is a free educational tool that can help you as an entrepreneur by shifting your focus from the headaches of business plan creation, and financial calculations, to the more critical research and analysis of required market data.

The Entrepreneur » Provides Data
The FW » generates financial statements, calculates financial ratios, perform breakeven analysis, and generates a business plan.
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Business Plans 101

"A business plan is a written outline that you present to others, such as investors, whom you want to recruit into your venture. It’s your pitch to your investors, sharing with them what the goals of your startup are and how you expect to be profitable." (Credit: Skye Schooley)

There are different types of business plans, including the lean canvas model and the traditional model. The FW will help you generate a traditional business plan.

The Company
A traditional business plan starts off with a description of the company and what you are offering (products and services).
1. Executive Summary
2. Company Description
3. Products and Services
4. The Management Team

Market Analysis
In this part of the business plan, define your market and target audience. This section should also include a marketing plan and a SWOT analysis.
The FW will not help you in this part.

Operational Plan
As a startup, you need to have a plan of how you will bring your product or service to market. In other words, you need to detail your day-to-day operations.
The FW will not help you in this part.

Financial Plan
The financial plan should include a detailed overview of your finances. At the very least, you should include cash flow statements, and profit and loss projections, over the next three to five years. You must demonstrate that your business idea is profitable. Thus, as a minimum, you must include the following:
Income statement
Cash Flow Statement
Break-Even Analysis

Financial Statements 101

Financial Statements (sometimes called financial reports) are tools that record a company's financial activities and provide information about the financial strength of that company.

Financial accounting in general (as opposed to managerial accounting) is aimed at external audience like investors, shareholders and the government. Looking at a company's financial statements, a potential investor can make the decision whether to invest or not based on the financial position of the company.

Income Statement
Income statements for companies indicate how Net Revenue (money received from the sale of products and services before expenses are taken out, also known as the "top line") is transformed into Net Income (the result after all revenues and expenses have been accounted for, also known as the "bottom line"). The purpose of the income statement is to show managers and investors whether the company made or lost money during the period being reported. (Source: Wikipedia)
Sales - COGS = Gross Profit
Gross Profit - Expenses = Net Income (or loss)

Cash Flow Statement
A cash flow statement is a financial report that shows incoming and outgoing money during a particular period (often monthly or quarterly). The statement shows how changes in balance sheet and income accounts affected cash and cash equivalents and breaks the analysis down according to operating, investing, and financing activities. As an analytical tool the statement of cash flows is useful in determining the short-term viability of a company, particularly its ability to pay bills. (Source: Wikipedia)
Total Cash In (Receipts) - Total Cash Out = Cash On Hand

Balance Sheet
A balance sheet, in formal bookkeeping and accounting, is a statement of the book value of a business or other organization or person at a particular date, at the end of a period such as a "fiscal year," as distinct from an income statement, also known as a profit and loss account (P&L), which records revenue and expenses over a specified period of time. A balance sheet is often described as a "snapshot" of the company's financial condition on a given date. Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time, instead of a period of time. (Source: Wikipedia)
Assets = Liabilities + Owner's Equity

Assets include Cash On Hand from Cash Flow Statement

				Liabilities include Current Period Earnings from Income Statement