1
00:00:00,003 --> 00:00:02,004
- Projected profit and loss.

2
00:00:02,004 --> 00:00:04,008
Your opening statement is a general description,

3
00:00:04,008 --> 00:00:06,005
so it can be brief.

4
00:00:06,005 --> 00:00:08,004
You might say something like this.

5
00:00:08,004 --> 00:00:10,009
The following profit and loss table and charts

6
00:00:10,009 --> 00:00:13,009
illustrate the total effect of revenue generation,

7
00:00:13,009 --> 00:00:16,006
direct cost of sales, operating expenses,

8
00:00:16,006 --> 00:00:19,006
and profitability for ABC LLC

9
00:00:19,006 --> 00:00:21,007
over the projected period.

10
00:00:21,007 --> 00:00:23,001
The following assumptions were made

11
00:00:23,001 --> 00:00:24,009
when preparing the profit and loss table

12
00:00:24,009 --> 00:00:27,007
in the first 12-month breakdown in the appendix

13
00:00:27,007 --> 00:00:30,003
found at the end of the business plan.

14
00:00:30,003 --> 00:00:32,006
So, what do you need to highlight?

15
00:00:32,006 --> 00:00:35,001
Here are some categories you'll want to expand on.

16
00:00:35,001 --> 00:00:37,009
Again, these are just examples we have used.

17
00:00:37,009 --> 00:00:39,009
Your plan may require more or less,

18
00:00:39,009 --> 00:00:41,006
depending on your approach.

19
00:00:41,006 --> 00:00:44,007
I like to use assumptions, payroll taxes,

20
00:00:44,007 --> 00:00:48,009
rents or mortgages, inflation or reduction of expenses,

21
00:00:48,009 --> 00:00:51,004
depreciation of assets, EBITDA,

22
00:00:51,004 --> 00:00:54,000
or earnings before interest, taxes,

23
00:00:54,000 --> 00:00:56,007
depreciation, and amortization,

24
00:00:56,007 --> 00:01:00,000
interest expenses, and taxes incurred.

25
00:01:00,000 --> 00:01:01,002
Once you have written statements

26
00:01:01,002 --> 00:01:02,006
for each of these categories,

27
00:01:02,006 --> 00:01:03,005
you'll want to create

28
00:01:03,005 --> 00:01:06,002
a three-year profit and loss statement table,

29
00:01:06,002 --> 00:01:08,001
like the example in your handouts,

30
00:01:08,001 --> 00:01:10,008
and also shown here on the screen.

31
00:01:10,008 --> 00:01:14,000
Now we can see an itemized list of sales and expenses,

32
00:01:14,000 --> 00:01:16,005
as well as net profit percentages.

33
00:01:16,005 --> 00:01:17,003
At a glance,

34
00:01:17,003 --> 00:01:19,005
the investors should be able to get a general idea

35
00:01:19,005 --> 00:01:21,000
of what their investment will look like

36
00:01:21,000 --> 00:01:23,000
over the next three years.