LivePlan is one of the better-known tools for creating business plans and financial projections.
But if you're preparing to start a business and primarily need help creating the financial side of your plan, you may be looking for a free LivePlan alternative.
Maybe you want to evaluate whether a business idea makes financial sense.
Maybe you're preparing a business plan.
Maybe you're applying for an SBA or other business loan.
Or perhaps you simply don't want to pay for business planning software before you've even launched your company.
Whatever the reason, there are several ways to create financial projections for a new business, ranging from building your own spreadsheets to using software that automates the financial modeling.
Here's what to consider.
What Does LivePlan Do?
LivePlan is a business planning platform designed to help entrepreneurs create business plans, financial forecasts, and other planning materials.
For someone who wants a broader guided business-plan-writing experience in addition to financial planning, that can be useful.
But not every entrepreneur needs the same thing.
If you've already thought through the narrative portions of your business plan and primarily need help determining whether the numbers behind your business work, you may be more interested in financial projection capabilities.
That means understanding areas such as:
- Startup costs
- Revenue
- Expenses
- Employees
- Financing
- Cash flow
- Profitability
- Break-even
- Projected financial statements
In that case, it makes sense to evaluate alternatives based specifically on how they help you build and understand the financial plan for your new business.
Why Look for a Free LivePlan Alternative?
There are several reasons someone planning a new business might look for another option.
You're Still Evaluating the Idea
You may not know whether you're actually going to launch the business yet.
Before paying for planning software or professional services, you may simply want to understand whether the economics behind the idea appear reasonable.
You Primarily Need Financial Projections
A complete written business plan and a financial plan aren't exactly the same thing.
If you've already developed your business concept, target market, strategy, and other narrative elements, your biggest challenge may be turning your assumptions into financial projections.
You're Preparing for Financing
If you're preparing to approach an SBA lender or another financing source, you may need projected financial statements and supporting financial schedules.
Your lender's requirements should ultimately determine what documentation you prepare.
You Want to Avoid Building a Financial Model Yourself
Spreadsheets can be used to build extremely sophisticated financial models.
But you still need to know how to construct the model.
An entrepreneur who doesn't have financial modeling experience may prefer software that performs the calculations automatically.
Option 1: Build Your Financial Projections in a Spreadsheet
One free or low-cost option is to build the projections yourself using spreadsheet software you already have access to.
This gives you significant flexibility.
You can create exactly the model you want and change any calculation you choose.
The tradeoff is that you are responsible for building and maintaining it.
That can include creating:
- Revenue schedules
- Expense forecasts
- Employee calculations
- Loan amortization
- Startup cost schedules
- Cash-flow calculations
- Projected income statements
- Projected balance sheets
- Supporting formulas
If you already understand financial modeling, this may be perfectly reasonable.
If you don't, the spreadsheet itself can become one of the most difficult parts of creating your projections.
Option 2: Use Free Templates
Another option is to download business-plan or financial-projection templates.
Templates can give you a useful starting structure and may save time compared with beginning from a blank spreadsheet.
However, templates still generally require you to understand what information belongs where and how the underlying calculations work.
They may also require customization if your business doesn't fit the assumptions built into the template.
Before relying on any template, make sure you understand its formulas and verify that your assumptions flow through the financial statements correctly.
Option 3: Work With a Business Advisor
Organizations such as SCORE and Small Business Development Centers may provide business-planning assistance to entrepreneurs.
An advisor may help you think through assumptions, review your business plan, or identify issues you haven't considered.
Availability and services vary, and you may still need a way to actually construct the financial projections.
Combining knowledgeable guidance with financial planning software can be useful because the software handles the calculations while you and your advisor focus on whether the assumptions make sense.
Option 4: Use StartSmart to Create Financial Projections for Free
StartSmart is another option for entrepreneurs planning a new business.
Rather than requiring you to build the underlying financial model yourself, StartSmart guides you through questions about how you expect the business to operate.
You provide assumptions about areas such as:
- Startup costs
- Sales
- Pricing
- Expenses
- Employees
- Financing
- Timing
StartSmart then performs the financial modeling and calculations and automatically turns those assumptions into a complete financial plan.
And you can use StartSmart to plan one new business completely free.
StartSmart vs. LivePlan: What's the Difference?
LivePlan and StartSmart overlap in some areas, particularly around financial planning for new businesses, but they aren't identical products.
LivePlan provides a broader business-planning platform that includes tools for developing the written business plan in addition to financial forecasting.
StartSmart is focused specifically on helping you understand and build the financial plan behind a new business.
Instead of requiring financial modeling experience, StartSmart takes your business assumptions and automatically generates the financial projections and supporting financial information.
Depending on what you're trying to accomplish, StartSmart can help create:
- Projected income statements
- Projected cash flow statements
- Projected balance sheets
- Startup cost schedules
- Sources and uses of funds
- Revenue projections
- Expense projections
- Employee cost projections
- Loan projections
- Break-even analysis
- DSCR analysis
- Supporting financial documentation
If you primarily want a broader business-plan-writing platform, LivePlan may be a better fit.
If your priority is understanding the financial viability of a new business and creating the financial projections and supporting documentation behind your plan, StartSmart provides a different approach.
And for one new business, StartSmart is completely free.
Which Option Should You Choose?
The best choice depends on what you need.
Use a spreadsheet if you're comfortable building and maintaining financial models yourself and want maximum flexibility.
Use a template if you want a starting framework and are comfortable working with its formulas.
Work with an advisor if you want another person to help challenge your assumptions and think through the business.
Consider LivePlan if you're looking for a broader paid business-planning platform that includes both written business planning and financial forecasting.
Consider StartSmart if you're planning a new business and want software to automatically turn your assumptions into a complete financial plan, projections, and supporting documentation without building the financial model yourself.
These approaches aren't necessarily mutually exclusive.
For example, you could use StartSmart to create your financial projections while working with a SCORE mentor or other advisor to review the assumptions behind your plan.
What If You Need Financial Projections for an SBA Loan?
If you're seeking financing to start the business, make sure whatever approach you choose can help you prepare the financial information your lender requests.
Depending on your situation, that might include:
- Projected financial statements
- Startup costs
- Sources and uses of funds
- Loan assumptions
- Cash-flow projections
- Break-even analysis
- DSCR analysis
Always ask your lender what documentation is required for your specific application.
StartSmart can help create these types of financial projections and supporting schedules, which makes it particularly relevant if your reason for looking at LivePlan is preparing the financial side of a loan application.
Free Doesn't Mean You Should Take the Numbers Less Seriously
Whether you use LivePlan, StartSmart, a spreadsheet, a template, or another approach, the quality of your projections still depends on your assumptions.
Software can calculate the numbers.
It can't make an unrealistic assumption realistic.
Research your expected costs. Think carefully about pricing. Understand how many customers you can reasonably serve. Consider how quickly sales may ramp up. Make sure you've accounted for the cash needed before the business can support itself.
The purpose of financial projections isn't to produce the most attractive numbers.
It's to help you understand what needs to happen financially for your new business to work.
Try StartSmart as a Free LivePlan Alternative for Financial Projections
You shouldn't have to spend money just to determine whether a new business idea makes financial sense.
If you're looking for a free LivePlan alternative because your primary goal is to create financial projections and understand the numbers behind a business you're planning, StartSmart gives you another option.
Answer guided questions about your new business and StartSmart automatically turns your assumptions into a complete financial plan, projections, and supporting documentation without requiring you to build spreadsheets, formulas, or financial models yourself.
And you can use StartSmart to plan one new business completely free.
Start building the financial plan for your new business with StartSmart for free today.
