Starting a business means answering some important financial questions.
How much money will you need to get started? How much revenue could the business generate? What will your monthly expenses look like? How many employees can you afford? When could the business break even? And if you need financing, will the business generate enough cash to support its loan payments?
Answering those questions often means building complicated spreadsheets, paying for financial planning software, or hiring someone to create financial projections for you.
StartSmart provides another option.
StartSmart is financial planning software from Projection Genie that helps aspiring entrepreneurs turn assumptions about a new business into a complete financial plan, financial projections, and supporting documentation automatically.
And you can use StartSmart to plan one business completely free.
StartSmart is available to everyone, regardless of race or background. But as a Black founder, I believe it's particularly important to make sure aspiring Black entrepreneurs know this resource exists and that understanding the numbers behind a business idea doesn't have to require spending hundreds or thousands of dollars.
Why Making Financial Planning More Accessible Matters
Black entrepreneurs continue to make significant contributions to the U.S. economy.
According to the U.S. Census Bureau, there were approximately 201,000 Black-owned employer businesses in the United States in 2023. Those businesses generated approximately $249 billion in receipts.
At the same time, Black-owned businesses represented just 3.4% of U.S. employer businesses.
Research from the Federal Reserve's Small Business Credit Survey also continues to examine differences in financial conditions, credit demand, and financing outcomes based on the race and ethnicity of business owners.
Software isn't going to eliminate the challenges that Black entrepreneurs may encounter accessing capital, building networks, or starting and growing businesses.
But creating and understanding a financial plan shouldn't be another unnecessary barrier.
That's one barrier we can help remove.
What Is StartSmart?
StartSmart is designed for people who are planning a new business and want to understand its potential financial performance before they launch.
Instead of starting with a blank spreadsheet, you answer guided questions about the business you're considering.
For example:
- What are you planning to sell?
- How much will you charge?
- How many customers or units do you expect?
- What will it cost to start the business?
- What recurring expenses will you have?
- Will you need employees?
- How much will you pay them?
- Will you need a business loan?
- How much money will you personally contribute?
StartSmart takes those assumptions and automatically performs the financial modeling behind them.
That means you can spend your time thinking about the business rather than figuring out how to construct financial models and spreadsheet formulas.
See Whether the Numbers Behind Your Business Idea Make Sense
One of the most important reasons to create financial projections is that a good business idea doesn't necessarily mean the numbers behind the business will work.
Suppose you're planning to open a business that you believe can generate $500,000 in annual revenue.
That number sounds promising by itself.
But what if generating that revenue requires $200,000 in payroll, $100,000 in inventory, $60,000 in rent, $50,000 in other operating expenses, and significant monthly loan payments?
Revenue alone doesn't tell you whether the business works.
Financial planning helps you see how sales, expenses, staffing, financing, and other assumptions work together.
StartSmart helps you model those assumptions before you've committed your money.
Create Financial Projections Without Building a Spreadsheet
You don't need to know how to build a financial model to use StartSmart.
Based on the assumptions you enter, StartSmart can automatically create projected financial statements including:
- Income statements
- Cash flow statements
- Balance sheets
These projections allow you to see how your assumptions could affect the business over time.
You can also model different scenarios.
For example, what happens if sales grow more slowly than expected?
What if you delay hiring an employee?
What if startup costs are higher than you originally estimated?
What if you borrow more or less money?
Modeling different scenarios can help you understand how sensitive your business plan is to changes in your assumptions before you make those decisions in the real world.
Understand How Much Money You Need to Start
Underestimating startup costs can put a new business under financial pressure before it has an opportunity to become established.
StartSmart helps you identify and organize the costs required to launch your business.
Depending on the business, those costs might include:
- Equipment
- Inventory
- Lease deposits
- Renovations
- Licenses and permits
- Insurance
- Technology
- Professional services
- Initial marketing
- Franchise fees
- Payroll
- Working capital
Understanding these costs can help answer an extremely important question:
How much money do I actually need to start this business?
You can then think about how that money will be funded, including your own investment and any outside financing.
Understand When Your Business Could Break Even
A business doesn't become financially viable simply because it starts generating sales.
Your revenue eventually needs to support the costs required to operate the business.
StartSmart's break-even analysis helps you understand how much the business may need to sell before revenue is sufficient to cover its expenses.
That can help you evaluate whether the sales assumptions behind your business plan are realistic.
If your projections show that the business needs far more customers than you originally expected to break even, that's important information to discover before you launch.
You can adjust your assumptions, rethink your pricing, reconsider expenses, or determine whether the business model needs to change.
Prepare Financial Projections for a Business Loan
Many entrepreneurs need financing to start a business.
If you're preparing to approach a lender, understanding your numbers becomes even more important.
StartSmart can help you build financial projections and supporting documentation that may be needed when preparing for a business or SBA loan application.
Depending on your plan, this can include:
- Projected financial statements
- Startup cost schedules
- Sources and uses of funds
- Loan assumptions
- Debt service calculations
- DSCR analysis
- Break-even analysis
- Supporting financial schedules
You can also create a financial loan package based on the scenario you're planning to pursue.
Individual lenders can have different requirements, so you should always confirm exactly what your lender requires.
But instead of approaching that conversation without understanding the financial mechanics of your business, you'll already have spent time thinking through the assumptions behind your plan.
You Don't Have to Make Your Projections Look Perfect
Financial projections aren't predictions.
Nobody knows exactly how much revenue a new business will generate three years from now.
The purpose of financial planning is not to produce the most impressive numbers possible.
It's to ask:
What would need to happen for this business to work?
If your financial plan only works when everything goes perfectly, that's useful information.
If the business still appears viable when you model lower sales, higher expenses, or a slower launch, that's useful information too.
The value comes from understanding the assumptions and how changes to them affect the business.
Why We Made StartSmart Free
We originally charged entrepreneurs to use StartSmart, $299 per year in fact.
We ultimately decided there was greater value in removing that cost for someone trying to determine whether starting a business makes financial sense.
Aspiring entrepreneurs already have enough expenses to think about.
Paying for software just to understand whether a business idea is financially viable doesn't need to be another one.
That's why you can now use StartSmart to create a complete financial plan for one business at a time completely free.
There is no requirement that this be your first business. Whether you're considering entrepreneurship for the first time or you've owned businesses before, you can use your free StartSmart project to plan for one new business at a time.
Why I Want Black Entrepreneurs to Know About StartSmart
StartSmart isn't a program exclusively for Black entrepreneurs.
It's free for everyone.
But making a resource available and making sure people know it exists are two different things.
As a Black founder, it's personally important to me that aspiring Black entrepreneurs are aware that they can use StartSmart.
There are much larger challenges surrounding entrepreneurship and access to capital that a software product cannot solve.
What we can do is make the financial planning portion of starting a business easier and more accessible.
If someone has an idea for a business, I don't want the cost of financial planning software or a lack of financial modeling experience to prevent them from examining whether that idea makes financial sense.
You should be able to understand your numbers before you put your savings at risk, take out a loan, sign a lease, leave a job, or make another major financial commitment.
Plan One Business at a Time Completely Free
If you're thinking about starting a business, don't wait until after you've invested your money to understand how the numbers work.
Figure out what it could cost to launch.
Model how the business could generate revenue.
Understand your expenses.
Determine how much financing you might need.
See when you could break even.
Explore what happens if things don't go exactly according to plan.
And build your projected financial statements before you make major financial commitments.
StartSmart helps you do all of that without building complicated spreadsheets or having financial modeling experience.
Anyone can use StartSmart to plan one business completely free.
Know your numbers before you launch.
