Business Plan: Budgeting

The financial section of a farm business plan determines whether your business idea is viable and will most likely be required if you are seeking a loan or other financing. The financial section often includes three different types of financial statements that are described below: the income statement, the balance sheet, and the cash flow statement.  

Basic Accounting: Guidance for Beginning Farmers  (National Center for Appropriate Technology/ATTRA) This document provides an overview of Income Statements, Balance Sheets and Cash Flow Budgets with examples of each.  

AgPlan (Center for Farm Financial Management, UMN) AgPlan is an easy business plan app that anyone can use. The AgPlan financial spreadsheet is an Excel-based set of financial spreadsheets that includes a balance sheet, income statement, and cash flow tool.  

Income Statements (also called a Profit and Loss Statement, and is similar to an Enterprise Budget) 

The income statement is a report of the farm business’ financial performance during a given time frame (often a calendar year). It captures a business’ income, expenses, and the net profit or loss. A "Pro Forma Income Statement" provides the projected profitability of the business for the upcoming accounting period. 

Income Statement Templates 

Balance Sheets (also called a Net Worth Statement or Financial Statement)  

A balance sheet is a snapshot at a point in time that shows what a business owns against what is owes. It contains a business’ assets, liabilities, and its net worth and helps to judge the ability of the business to pay off current debts and take on additional ones. 

Balance Sheet Templates 

Cash Flow Statements 

A cash flow statement provides information on the cash coming in and going out of a business during a specific period. It shows where the money comes from and where the money goes and analyzes how cash was used to meet financing, investing, and operating activities. A cash flow projection is an estimate or forecast of cash inflow and outflow into some future period. It reveals the cash generating ability and the cash requirements of a business and it indicates the timing of both. 

Cash Flow Statement Templates