Create a Balance Sheet for a Startup

A startup balance sheet is difficult to prepare, even if there isn’t much to include. The balance sheet shows the value of the assets you have purchased for startup, how much you owe to lenders and other creditors, and any initial investments you have made to get started. After you have completed the monthly budget and you have balance sheet startup gathered some other information, you should be able to complete a Profit and Loss or Income Statement. This statement shows your business activity over a specific period of time, like a month, quarter, or year. Some lenders may ask for a break-even analysis, a cash flow statement, or a sources and uses of funds statement.

Doing so will ensure you have accurate information regarding how your company invests and spends money. A complete balance sheet allows you to identify areas of concern and patterns in profit and loss. They help potential investors and lenders ensure that their bet on your company is a safe one. By analyzing your company’s debt-to-equity ratio, they can gain an essential overview of your company’s financial health and creditworthiness. A balance sheet is a financial statement that shows your assets, liabilities, and equity. Assets are everything your company owns – from cash in the bank to inventory on hand.

Why Does a Business Need a Balance Sheet?

By studying your balance sheet, income statement and cash flow statement on a regular basis, you can gain insights into how well your business is doing financially and make adjustments accordingly. You can also use KPIs to track the success of specific initiatives or strategies and make adjustments accordingly. Finally, you can use financial ratios such as debt-to-equity ratio or return on investment to compare your company’s performance against industry benchmarks or competitors. Use this simple, printable small business balance sheet template to calculate your small business’s year-to-year total assets, total liabilities, balance, and net worth. Enter your current and fixed assets, your current and long-term liabilities, and your owner’s equity.

As with assets, liabilities can be classified as either current liabilities or non-current liabilities. Assets can be further broken down into current assets and non-current assets. It’s hard to overstate the importance of reconciling your model to what actually happens month over month. This will help you drill down your assumption values and face the reality of the long-term health of your business.

Understand the Startup’s Business Model

A marketing plan is typically part of a business plan, but you can use this dedicated template for developing a thorough plan and schedule. While researching your business plan, both risks and opportunities are likely to arise. This critical information gives you the chance to plan for how you will take advantage of or address them as needed. A SWOT analysis helps you identify and gain a clear understanding of internal strengths and weaknesses as well as external opportunities and threats. The results of the analysis will inform your business goals and strategies for reaching them. Once completed, you can add this SWOT template to a startup business plan or use it as a planning tool.

balance sheet startup

Pro forma income statements consider historical or market analysis data to calculate the estimated sales, cost of sales, profits, and more. This method records revenue and expenses when they are earned or incurred rather than when payment is received or made. This approach allows startups to better understand the long-term financial impact of their operations, as well as the relationship between their current and future activities.

How to Make a Balance Sheet for a Startup Company

The three main components of a balance sheet are assets, liabilities, and equity. Create a streamlined business plan document on a single page with this Word template. A simplified plan can be helpful for summarizing information into a brief report.

balance sheet startup