Three-year business plan financial model

What the three-year business plan financial model does

Lenders, investors and you yourself need to see where the business is going. This model projects thirty-six months from a few assumptions on the Rates sheet: the starting sales, the monthly growth, the cost of sales percentage, the fixed costs and their yearly increase, and the tax rate. It produces monthly figures, a running total of profit and a yearly summary with charts.

Who it is for

Entrepreneurs preparing a business plan, a bank loan application or an investor pitch, and accountants and consultants who build quick forecasts for clients.

How to use the workbook

1. Open the Rates sheet and replace the assumptions with your own, with a note of where each came from.
2. Read the monthly projection on the Model sheet.
3. Look at the yearly summaries of sales and profit.
4. Change one assumption at a time to see how sensitive the plan is.
5. Save a copy under a new name for each month or year, so earlier records stay as they were.

What is inside

• Thirty-six monthly projections
• Sales growth, cost of sales and fixed costs from assumptions
• Tax and profit after tax
• Running total of profit
• Yearly sales and profit summaries with charts

The workbook has these sheets: Instructions, Model, Yearly sales, Yearly profit, Rates. The main table has the columns Month; Year; Sales; Cost of sales; Gross profit; Fixed costs; Profit before tax; Tax. Yellow cells are for you to fill in and grey cells calculate by themselves, so leave the grey cells alone. The example rows show how it works; type over them with your own entries.

Tips for getting it right

• Base your starting sales on real evidence, such as pilot sales or quotes.
• Be cautious with growth; a few percent a month compounds quickly.
• Show a best case and a worst case as well as the base case.
• Update the model with actual figures every quarter.

Why keep this record

Running a business on memory works until it grows. Writing the numbers down turns opinions into facts you can compare month to month, and shows early which products, customers or costs deserve attention. Even a simple workbook, used every week, usually beats a sophisticated one that is opened once a year.

Questions people ask

Do I need to know Excel formulas? No. Type into the yellow cells and the rest is worked out for you. The formulas are visible if you want to see how a figure is reached.

Can I add rows or change the layout? You can add your own columns to the right and your own notes. If you insert rows inside a table, copy the grey formula cells down so the new rows calculate too.

Will it work on my phone or in Google Sheets? Yes for viewing and typing, but dropdown lists and the charts look best in desktop Excel or LibreOffice.

Keeping it safe and up to date

A plan is only as good as the numbers you put in. Start with honest estimates, update the workbook as real figures arrive, and compare the two so your next estimate is better. Save a dated copy each month so you can see how your thinking changed.

Read how to build a cash flow forecast for the wider picture. See more business templates or ask us for a custom one.

The workbook works in Microsoft Excel, LibreOffice and Google Sheets. It is a tool to help you work out and record figures, not tax, legal or accounting advice, and it is not affiliated with the Kenya Revenue Authority. If something does not work as described, contact us and we will put it right.

Related guides, calculators and templates

• Guide: How to build a 12-month cash flow forecast for a small business
• Guide: How to price your products and services: markup, margin and break-even
• Guide: Turnover tax for small businesses in Kenya: rate, limits and when to use it
• Another template: 12-month cash flow forecast
• Another template: Break-even and pricing calculator
• Another template: Budget versus actual tracker

Need something different? Request a custom template, browse all guides or see every Excel template.