# Cash Flow Forecast Template for a Business Plan: What to Include Source: https://www.cashflowforecasttemplates.co.uk/guides/cash-flow-forecast-template-for-a-business-plan Updated: September 25, 2026 > A cash flow forecast for a business plan usually covers the first 12 months month by month and years two and three annually. It should include start-up costs, funding and repayments, realistic sales and payment timing, every running cost including owner pay, a short list of assumptions, and a worst case showing the business can survive a slower start. Every business plan needs a cash flow forecast. Lenders use it to decide whether you can repay a loan; investors use it to judge how much money you need and how long it will last; and you should use it to check the plan actually works before you commit. This guide explains what a business plan cash flow forecast should include and how to make it convincing. ## The standard format - **Year one, month by month.** Twelve columns showing start-up costs, the ramp-up in sales and the months where cash is tightest. - **Years two and three, annual totals.** Showing growth and whether the business becomes self-funding. - **Opening and closing balances** for every period. - **An assumptions page** explaining the numbers. Some investors want five years; many lenders are happy with two or three. ## What to include ### Start-up costs and timing Equipment, fit-out, deposits, opening stock, launch marketing, legal and professional fees, and software set-up, each in the month it’s paid. ### Funding Owner investment, loans, grants and equity, in the month the money arrives. Show loan repayments and interest as cash out, starting when they begin. ### Sales, built from the bottom up Base sales on capacity and realistic demand, such as customers per day, orders per week or billable days, with a ramp-up over the first months. Explain the basis in your assumptions. ### Payment timing When customers pay (card payments in days, invoices in 30 to 60 days) and when you pay suppliers. New businesses often pay suppliers faster than they’re paid. ### Running costs Wages and payroll taxes, rent, utilities, insurance, marketing, software, professional fees, and **owner pay or drawings**. Lenders will notice if you haven’t included how you’ll live. ### Tax Sales tax or VAT and income or corporation tax, in the periods they’re paid. ## An example summary A new café plans to open with $100,000: $60,000 of the owner’s money and a $40,000 five-year loan. Year one is shown monthly in the full forecast; the business plan summary looks like this: | | Year 1 | Year 2 | Year 3 | |---|---|---|---| | Opening cash | 100,000 | 32,600 | 61,100 | | Sales receipts | 355,000 | 470,000 | 505,000 | | Start-up costs | −58,000 | 0 | 0 | | Running costs, wages, owner pay | −355,600 | −432,700 | −458,000 | | Loan repayments | −8,800 | −8,800 | −8,800 | | **Closing cash** | **32,600** | **61,100** | **99,300** | Year one uses most of the starting cash, which is normal for a new business, and the monthly detail shows the lowest point of about $21,000 around month four. From year two the business funds itself and repays the loan from its own cash. A lender reading this would look first at that month-four low point and the worst case, then at whether the year-two sales growth is explained on the assumptions page. ## The assumptions page A forecast without assumptions is just numbers. A short page, even a table, makes it credible: | Assumption | Value | Source | |---|---|---| | Average sale | $42 | Menu prices, competitor check | | Customers per day, month 1 | 60 | 50% of capacity during ramp-up | | Customers per day from month 6 | 120 | Similar cafés in the area | | Card settlement | 2 days | Payment provider terms | | Staff costs | $9,500/month | 3 staff, local wage rates | | Rent | $3,200/month | Signed heads of terms | Anyone reading the forecast can then challenge an assumption, rather than the whole plan. ## Show a worst case Include a second version with slower sales, perhaps 30 percent lower, a delayed opening and higher costs. Show that the business still has cash, or explain what you’d do: reduce hours, delay a hire, use an agreed overdraft. A plan that only works if everything goes right is a warning sign to any lender. See [how to forecast for a new business](/guides/how-to-forecast-cash-flow-for-a-new-business-with-no-history) for how to build one. ## Presenting it in your plan Put a one-page summary in the main business plan and the full detail in an appendix: - **Summary page:** the three-year table, the lowest cash point in year one and when it falls, the funding you’re asking for, and two or three sentences on the main assumptions. - **Appendix:** the full 12-month forecast, the assumptions page and the worst case. - **A chart:** the closing balance month by month for year one makes the story obvious at a glance, especially the low point and the recovery. Keep the numbers consistent everywhere they appear. If the text says you expect 120 customers a day by month six, the forecast should show exactly that. Round figures to the nearest hundred; spurious precision makes a forecast look less credible, not more. Finally, date the forecast and note when it was last updated, because lenders may ask for a refreshed version before they decide. ## How lenders read your forecast 1. **The lowest balance.** Is there always enough cash, including a buffer? 2. **Debt service.** Can the business afford the repayments from its own cash flow, not just from the loan itself? 3. **Owner commitment.** How much are you putting in? 4. **Realism.** Are sales and margins in line with similar businesses? 5. **Completeness.** Are tax, insurance, drawings and annual costs all there? ## Linking to your profit forecast Most business plans also include a profit and loss forecast. The two should tell the same story: the same sales and costs, but the cash flow forecast shows when the money actually moves, and adds items that don’t appear in profit, like loan capital, equipment purchases and VAT. If profit looks good but cash goes negative, the plan needs more funding or better timing. [Cash flow vs profit](/guides/cash-flow-vs-profit-why-profitable-businesses-run-out-of-cash) explains why they differ. ## Common mistakes in business plan forecasts - **Hockey-stick sales** with no explanation. - **No owner pay.** - **Missing VAT or sales tax.** - **Loan in, no repayments out.** - **No buffer**, so the lowest month sits just above zero. - **Figures that don’t match the text** of the business plan. - **No dates.** A forecast should say which month it starts and when it was prepared. - **Ignoring seasonality.** If your trade is seasonal, a flat monthly sales figure is a red flag to any experienced reader. ## Templates For the first year, the free 12-month template has the right layout. Premium templates add the three-year outlook, scenarios and a dashboard you can paste into your plan, with industry-specific lines such as food costs for a [restaurant](/cash-flow-forecast-template/restaurant) or runway for a [startup](/cash-flow-forecast-template/startup). ### How many years should a business plan cash flow forecast cover? Usually three years: the first year month by month and years two and three as annual totals. Some investors ask for five. ### What do lenders look for in a business plan cash flow forecast? Realistic, explained assumptions, all costs including loan repayments and owner pay, enough cash to survive a slower start, and evidence that repayments are affordable. ### Should I include the loan I’m applying for? Yes. Show it as cash in when you expect to receive it, and the repayments as cash out, so the lender can see the plan works with their money. ### Do I need a profit forecast as well? Most business plans include a profit and loss forecast and sometimes a balance sheet. The cash flow forecast shows whether the business can pay its way while it reaches profitability. ### What is an assumptions page? A short list explaining where your key numbers come from: prices, sales volumes, payment terms, wages and costs. It makes the forecast credible.