Pro Forma Financials: A Key to Business Building


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Show Overview:

On today’s episode, we are joined by Carlos Careaga, a Finance Director for Associated Students at San Diego State University. He is here to break down the importance of pro formas financials and why they are key to your business. We discuss what goes into a pro forma (05:14), the importances of questions and research (07:32), we share a couple of stories (17:04), and talk about rules and regulations (36:27).  

About GFGF:

The Get Found Get Funded podcast is at the intersection of entrepreneurship and social justice where we focus on entrepreneurship as a possible path to wealth creation — specifically for Black and Latinx communities.


Featured Guest: Carlos Careaga

Carlos Careaga, Senior Finance Professional with 19 years expertise in the areas of Financial Analysis, Annual plan, Forecasting, Financial Modeling, Leadership, Coaching, Strategic Analysis, Percentage of Completion Methodology, Change Management, Controllership experience, Mentoring, Process Improvement, Oracle, and SAP

Learn More About Carlos Careaga:


Key Takeaways: 

  • There is a huge distinction between being a business owner and an entrepreneur – and it’s not just mindset
  • Relationship Capital is our networks and who we know
  • Extracting value from a business is where true wealth is made
  • Being exposed to ideas is the first step to doing better



01:00    Intro

01:56    Carlos Careaga’s background

03:40    The definition of pro forma financials

05:14    What goes into a pro forma?

12:14    Pro forma numbers versus reality

14:54    Where do to begin

28:03    Profit and loss definition

30:41    Balance sheet definition

33:53    The cash flow statement

36:27    Tax rules, accounting rules, and regulations

39:55    Understanding your numbers

44:30    Outro



Quotes from the Show:

  • “Innovative is really the hardest one to convince [investors] to take a chance on because they don't have any way to gauge what profitability should look like, what success should look like. You're asking them to take a leap of faith.”
  • “Doing the best you can to create your own set of benchmarks and doing whatever you can to find comparable companies is going to be key to that success.”
  • “In the past I was working with somebody, a small business owner who was doing so many things, so spread out so thin. I asked “what is it that you're trying to accomplish just tomorrow?” Just back it down to the basics for me and if you can't answer that question in my mind, it's hard to build the credibility you need with investors and bankers.”
  • “You have to have a certain level of focus … If you can't do it that quickly, then maybe you spread out too thin because very few small business owners have the resources and have the ability to do so many things and do well such that they're going to attract investors and business owners or employees and bankers to their or entity”
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