Skip Header Navigation


» Business Solutions
Resource Center
  Business Tips
  Starting a Business
  Getting Ready
  Assemble Your Support Team
  Create the Plan
  Working With RBC
  Managing Your Money
  Growing Your Business
  Growing your Business
  Expanding a Business
  Business Succession
  Women Entrepreneurs
  Industry Expertise
» Business Accounts
» Borrowing & Credit
» Cash Management
» Investments
» Merchant Services
» Payroll Services
» Online Banking
» Branch & ATM Locator
» Commercial Financial Services
» Contact Us
» Search
Starting a Business

Business Plans



The finance section is your opportunity to determine how viable your business is financially. It will also act as a benchmark for you to gauge your progress against your original projections.

To create your financial plan you'll first need to determine the type and amount of expenses your business will incur. This information will help you create the core financial statements for your business.

It's important to create a set of financial statements to show the expected results for the first or current year of operations. As well as estimates for projections based on certain assumptions regarding future events or operations for three to five years. If you are creating a business plan for an ongoing business, include financial statements from previous years.

It's important to be realistic in your financial projections and be skeptical of overly optimistic projections. You may even want to include best, worst and most likely case scenarios.


Your business will have two types of expenses: one-time expenses and operating expenses. As the name suggests, one-time expenses are those costs that you incur only once when setting up your business (e.g. incorporation fees). Operating expenses are ongoing costs that you will have to pay every month (e.g. rent for your office). Calculating these figures now is important because when you plug them into your cash flow statement, they will reveal how much start-up financing you will need to get your business to a point of self-sufficiency.

The following are worksheets to help you organize your expenses to help prepare the financial statements for your business plan.

One-Time Expenses

Your One-Time Expenses section may include, but is not limited to:

  • Downpayment on property or deposit on rent
  • Downpayment or deposit on fixtures and equipment (computer printer, fax machine, photocopier)
  • Cars/trucks
  • Decorating, remodelling, installation of equipment/fixtures, leasehold improvements
  • Starting inventory
  • Utility set-up fees
  • Promotion for opening
  • Licences and permits
  • Incorporation costs (where applicable)
  • Product development costs or franchise fees where applicable
  • Unexpected expenses

Operating Expenses

Your Operating Expenses section of your business plan may include, but is not limited to:

  • Your salary (management salaries)
  • Other salaries (eg. for your shipper, bookkeeper, receptionist)
  • Rent or mortgage payments
  • Raw materials
  • Storage
  • Distribution
  • Office supplies (eg. postage, pens, paper, photocopying, etc.)
  • Telecommunications (eg. telephone, fax, internet service, cellular, etc.)
  • Office equipment (eg. computer, printer, fax machine)
  • Electricity
  • Insurance, including premiums to be paid to your provincial workers' compensation board/commission.
  • Promotion (including advertising)
  • Selling expenses
  • Car expenses or travel
  • Professional services (accountants and lawyers, for example)
  • Maintenance
  • Repayment of loan capital and interest
  • Other financial expenses (eg. sales discounts, bad debts)
  • Other expenses

Income Statement

An income statement shows your profit or loss for a particular period of time, detailing all revenues, expenses and other costs. As with the cash flow statement, it should be prepared on a monthly or quarterly basis to allow for proactive management of any changes. While a cash flow statement is used to monitor a business' cash position, the income statement is predominantly an accounting tool used to measure a business' performance.

Think about when you will achieve break-even for your business venture. That is the level of sales in either dollars or units where revenue equals total costs.

example of an income statement

You will need Adobe Acrobat to view the statement.
If you don't have Acrobat, just click here!

Cash Flow Statement

The old saying that "cash is king" is true. Simply put, without cash, your business can't operate. A cash flow statement is a reflection of how much money your business has at a particular point in time. If your cash inflows (collected revenue) exceed your cash outflows (disbursements), your cash flow is positive. If your cash outflows (disbursements) exceed your cash inflows (collected revenue), your cash flow is negative. A cash flow statement enables you to see where cash is low and when you will have a surplus and should be prepared on a monthly basis, or at minimum, quarterly, to allow for proactive management of any changes. The key is anticipating - and planning for - these fluctuations.

Although your cash flow and income statements appear to be similar, there is a very important difference. Your cash flow includes details of the time when revenue is collected or expenses are paid.

Avoid the following common mistakes when preparing your Income Statement and Cash Flow Statement:

  • Projecting overly optimistic sales growth - most businesses grow gradually
  • Ignoring seasonality - is your business busiest in the summer or winter?
  • Underestimating increases in expenses or cash outflows that come with an increase in sales Assuming that collections will always be made in 30-60 days

example of a cash flow statement

You will need Adobe Acrobat to view the statement.
If you don't have Acrobat, just click here!

Balance Sheet

A balance sheet is a snapshot of the financial state of your business at a particular point in time. It outlines your assets, liabilities and equity and helps you know the net worth of your business. A balance sheet should list current assets such as accounts receivable, inventory you have on hand, and your cash balance. It should also list fixed assets such as property, equipment, furniture and fixtures, and vehicles.

Current liabilities might include accounts payable and debts that you must pay within a year (suppliers & creditors). Long-term liabilities include long-term loans, like mortgages, equipment loans or loans you make to the business. Shareholder's equity is made up of permanent funds put into the business yourself or from someone who invests in your business for a share of ownership (capital stock) and retained earnings.

example of a balance sheet

You will need Adobe Acrobat to view the statement.
If you don't have Acrobat, just click here!

To see the Finance section of a sample business plan, click on any of the company logos below:

Jump to
The Team
Business Environment
Marketing Plan
Risks & Conclusions
Glossary of Terms
Business Plan: Michael's Business Centre
Business Plan: Kamiko's Fine Food
Business Plan: Christine & Denis Landscapes

Take Action
  Call 1-800-769-2520
  Visit Your Local Branch
  Send Us an Email
  Apply Online

  Account Selector
  Loan Calculator

08/23/2010 11:15:26