The most important way of communicating your company’s financial health and attractiveness is through your financial statements; you should ensure that your statements are accurate and up-to-date. After all, you are competing with other entrepreneurs for funding and mentoring.
As the number of statements and the way these are set-up varies between regions, BidX provides you with a standard template. This way, both investors and mentors have a common view when assessing the various business plans that fit their investment appetite and preference.
There are three major categories of financial statements, the Income- the Cash Flow statement, and the Balance Sheet. We urge you to make sure you fill these out for the years your business has been operational.
‘Start’ tab: you will find a brief explanation on how to fill out the template and an explanation of terms used.
‘Profit & Loss’ tab: also known as the Income Statement, reveals a company’s profitability within a timeframe. This is useful for investors and mentors to assess whether your business made profit.
‘Cash Flow’ tab: shows the cash used / generated and is important to understand how cash is split up between operations, investments, and financing.
The other major statement is of course the Balance Sheet and is divided into two components. The first part reflecting the company’s assets such resources, equipments, and investments, whilst the second part shows liabilities and owner’s equity.
The three major statements combined provide a powerful means of communicating with Investors and Mentors. Our template covers more statements that you can use, but we recommend that you cover the ones mentioned, at least.