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Solar Business Plan Forecasts and Financial Presentation

Forecasts or projections are the steak to the solar business plan’s sizzle. As one of the most important part of the solar business plan from the lender or investor’s perspective, the forecast usually makes or breaks the deal. Forecasts can be even more important in a solar business plan, since the eco-business may to be breaking new ground in the marketplace or in some markets, have many competitors.

It is imperative that an energy business plan or solar business plan present the financial data correctly. The Executive Summary of the plan itself can often contain a summary forecast, providing the investor with a capsule view of income and expenditures.  The main body of the plan should have extended narrative about the forecasts, and supportive sections discussing the marketing budget and providing market analysis.  The appendixes should contain all detailed forecasts, with the Uses of Funds in the solar business plan.

The types of forecasts that most lenders, investors, and grant sources expect to see in a solar business plan are:

  •  Annual Forecasts, typically covering five years
  • Month to Month Forecasts, which are completed on an accrual month-to-month basis to establish cashflow requirements and project when the company—whether a start-up or expanding company—reaches the break-even point. Usually, One Year on a Month to Month basis is sufficient, although Web plans usually need two years.
  • Notes and Assumptions – Both the annual summary forecasts and detailed forecasts need footnotes, i.e. notes and assumptions in a separate worksheet that support virtually all income and expense assumptions. An investor or lender should never have to guess at the source of an assumption, and when this all too often occurs, template driven and plans by inexperienced authors find the trash can.
  • Cashflow analysis, which may be either a substitute for or provided in addition month to month basis.  The cash flow analysis provides accrual data and takes into account particulars such as the timing of receipt of accounts receivables.
  • Uses of Funds, which is a one to two-page worksheet that is included in the financial projections and solar business plan.   
  • Marketing & promotion budget, which is a critical and substantive portion of the forecast. This is the line item that that a green entrepreneur most often underestimates, and one about which investors are keenly interested. Therefore, the marketing & promoting budget is often presented in a standalone worksheet and should be supported by solar business plan narrative.
  • Schedules and charts for key assumptions apply to specific projections, like market penetration or cost of products.  They need to stand alone in the forecasts and solar business plan.

Where most plans come up short

Solar business plans often fail in their objective to raise capital because (1) the forecast is viewed as insufficient, incomplete, or unprofessional; and/or (2) lacks detailed notes and supporting information, on which assumptions of revenue and expenses are based.

Finally, many private or angel investors think more in words than in numbers, and your Executive Summary and solar business plan need concise narrative that reverts back to forecasts and Uses of Funds schedules. Developing a synergy between words and numbers is a matter at which Senior Consulting, LLC excels. We know the “what, when, where, why and how” of solar business plan writing and understand how to structure a plan to meet your needs and goals.

Ask us for more information.