What is Historical or Projected Financials?

I paid for a business plan. They are asking me what the Historical or Projected Financials are for the business. What does this mean? My family doesnt know.

Historical financials are what your business has done in the past, your profit and loss reports for the last several years.

Projected financials are what you expect your business to do in the NEXT several years. You usually need projected financials when you are seeking a loan to either expand your business or start a new business. A new business will not have historical financials since there is no past performance to review.

Are you starting a new business? Do you have any prior business management experience? If not, before you go any further, I STRONGLY recommend you contact the Small Business Development Center (at your local community college) and talk to them; the counseling is free. And sign up for the NxLevel Entrepreneurial program... it's a 12 session course that walks you through the ins and outs of starting or growing your business; part of that you will write a business plan. At the end of the class your plan will be reviewed by a lending professional, and will be critiqued, telling you the strong points of your plan AND the weak points.

Then you can work on the weak points and hopefully get it into shape to actually present to a lender and get the loan you need. There is a cost ($375.00 last year at my SBDC) for the NxLevel program, but it鈥檚 a lot cheaper than losing your investment.

Even if you hire a professional (as you did) to write your plan, you should still take the NxLevel course. It saved me from going into a business that would have failed within a year or so, taking my investment with it.

Business plans may be a pain in the butt to prepare, but without one, your business is doomed to failure. To start with, you won't know what your startup costs are going to be, what kind of income to expect, what your ongoing expenses are, who your competition is, and even whether or not you can make a profit. Without a GOOD business plan, you will not be able to get a business loan to get your business off the ground.

If you have alredy started the company you can provide information about your financial position (historical). They want to know what your expenses are and how much money your currently making. If you are in the process of starting it they want to know how much you expect to make in a certain amount of time, monthly annually, and what your expenses will be for that same time (projected). This is to show investors that your company can turn a profit.

I wish you hadn't paid. They are free at your local library. Historical means what did your business earn last year , 2 years ago, etc. What were your expenses each year. How many employees answered ads? How many stayed 6 months? 1 year? How much did you spend to advertise for employees. Did your raw material costs increase?
Projected Financials is the biggest joke in the world of business. Tell me one person at Ford Motor Company who predicted that gas would cost $4 a gallon in 2008. Not one of their experts did. So all their Projected Financials were wrong. And they are losing a fortune. /