Using AI to Create a Financial Plan

With ChatGPT 4o

An AI prompt to help you create a financial plan.

This last week, I presented an AI webinar for NACVA called “AI Prompt Engineering: How to Get Better Results from AI for Your Consulting Practice”

I showed attendees all my favorite tricks and frameworks for getting the most from ChatGPT and other LLMs. Someone from the audience asked if AI could create a financial plan but I simply ran out of time to show her how I would do it. So this week, I am sharing a prompt you could customize to fit your needs with a few adjustments.

I had a young, entrepreneurial visitor this weekend who is starting an eBike business here in Utah; I am using his business as an example. Here is the prompt I came up with:

“You are a highly skilled business analyst with a strong accounting background, specializing in financial planning for startups. Your task is to develop a comprehensive financial plan for a new eBike business. This plan should cover key financial aspects, including startup costs, revenue projections, expense forecasting, and funding strategies. You will need to consider various factors such as market trends, competition, and potential risks.

Here is the format you will use to reason through the problem and come up with a fantastic financial plan:

## Executive Summary

$executive_summary (Brief overview of the eBike business and the financial plan’s key highlights)

## Startup Costs

$startup_costs (Detailed breakdown of initial investments required, including inventory, equipment, marketing, and legal fees)

### Cost Breakdown Table

| Item | Estimated Cost |

|—|—|

| Inventory (eBikes) | $inventory_cost |

| Equipment (Tools, Repair Station) | $equipment_cost |

| Marketing & Advertising | $marketing_cost |

| Legal & Licensing | $legal_cost |

| Rent/Lease (if applicable) | $rent_cost |

| **Total Startup Costs** | **$total_startup_costs** |

## Revenue Projections (Year 1-3)

$revenue_projections (Forecasted sales revenue for the first three years, considering market demand, pricing strategy, and sales volume)

### Revenue Projection Table

| Year | Units Sold | Average Selling Price | Total Revenue |

|—|—|—|—|

| Year 1 | $year_1_units | $year_1_price | $year_1_revenue |

| Year 2 | $year_2_units | $year_2_price | $year_2_revenue |

| Year 3 | $year_3_units | $year_3_price | $year_3_revenue |

## Expense Forecasting (Year 1-3)

$expense_forecasting (Detailed forecast of operating expenses, including cost of goods sold, salaries, marketing, rent, and utilities)

### Expense Forecasting Table

| Expense | Year 1 | Year 2 | Year 3 |

|—|—|—|—|

| Cost of Goods Sold | $year_1_cogs | $year_2_cogs | $year_3_cogs |

| Salaries & Wages | $year_1_salaries | $year_2_salaries | $year_3_salaries |

| Marketing & Advertising | $year_1_marketing | $year_2_marketing | $year_3_marketing |

| Rent/Lease | $year_1_rent | $year_2_rent | $year_3_rent |

| Utilities | $year_1_utilities | $year_2_utilities | $year_3_utilities |

| **Total Expenses** | **$year_1_total_expenses** | **$year_2_total_expenses** | **$year_3_total_expenses** |

## Profit and Loss Statement (Year 1-3)

$profit_and_loss (Projected profit and loss statement for the first three years, showing revenue, expenses, and net profit)

### Profit and Loss Table

| Item | Year 1 | Year 2 | Year 3 |

|—|—|—|—|

| Total Revenue | $year_1_revenue | $year_2_revenue | $year_3_revenue |

| Total Expenses | $year_1_total_expenses | $year_2_total_expenses | $year_3_total_expenses |

| **Net Profit (Loss)** | **$year_1_net_profit** | **$year_2_net_profit** | **$year_3_net_profit** |

## Funding Strategies

$funding_strategies (Potential funding sources and strategies, including loans, investors, and bootstrapping)

### Funding Options

* $loan_options (e.g., Small Business Loan)

* $investor_options (e.g., Angel Investors, Venture Capital)

* $bootstrapping_options (e.g., Personal Savings, Revenue Reinvestment)

## Break-Even Analysis

$break_even_analysis (Calculation of the break-even point, indicating the sales volume required to cover all costs)

### Break-Even Calculation

* Fixed Costs: $fixed_costs

* Variable Costs per Unit: $variable_cost_per_unit

* Selling Price per Unit: $selling_price_per_unit

* Break-Even Point (Units): $break_even_units

## Risk Assessment

$risk_assessment (Identification of potential financial risks and mitigation strategies)

### Potential Risks

* $market_risks (e.g., Economic Downturn, Increased Competition)

* $operational_risks (e.g., Supply Chain Disruptions, Inventory Management)

* $financial_risks (e.g., Cash Flow Problems, Debt Management)

## Conclusion

$conclusion (Summary of the financial plan and its implications for the eBike business)

Here is the challenge you are tasked with: Develop a financial plan for a startup eBike business that focuses on direct-to-consumer online sales and offers a subscription-based maintenance and repair service. The business will initially operate in a single metropolitan area with plans for future expansion. Assume a moderate level of competition and a growing market for eBikes.”

Copy this prompt into ChatGPT 4o and change the business type to your client’s business and let me know if you like the results. You are going to be amazed!

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Colin Brown is an AI tech enthusiast with eight AI software programs to help you build a thriving consulting practice with some help from AI.

Mr. Brown may be contacted by e-mail to cto@syncnet.com or at https://syncnet.com