First Step Series

In recognition of the importance of small business to a strong economy, the National Business Association developed the First Step Review to help meet the informational needs of existing business owners and aspiring entrepreneurs.

The FIRST STEP SOFTWARE SERIES was developed by the NBA in 1989 by R. Jerry Adams, PHD, with a Co-Sponsorship Agreement with the U.S. Small Business Administration (SBA) and assistance from the SBA’s Small Business Development Centers. The First Step Review was updated in 1998 with the assistance of the Small Business Advancement National Center. The Review was again updated in 2006 and again in 2021. Each piece in the series was written to conform to SBA specifications and designed to make the loan process easy to understand.

What is the First Step Review?

First Step Review is a screening tool that helps smaller businesses (with less than 100 employees and annual sales of less than $5 million) determine the likelihood of qualifying for a SBA guaranteed loan. If your score is 70 or greater on First Step, then the next step would be to find a lender who is SBA certified for loans. However, if your score is less than 70 on First Step, your next step would be to find a counselor at your local Small Business Administration (SBA), Small Business Development Center (SBDC) or Service Corps of Retired Executives (SCORE) offices who can provide help with bettering your position and score.

Who Funds the Loan?

Loans come from local lenders, not the SBA; the SBA helps by guaranteeing a major portion of the loans to reduce the risk to lenders. Your local SBDC, SCORE chapter, or SBA office should be able to help you find a lender. A listing of certified lenders is available at your local SBDC, SCORE, or SBA office. Local offices should also be able to help you gain a better understanding of the criteria and steps necessary to qualify for a loan.

First Step Review Handbook

The handbook was designed as a tool to help you familiarize yourself with the First Step Review Program.   We suggest completion of all sections on this manual prior to using the First Step Review online or your personal computer.

Download the Handbook

Computer/System Requirements

First Step Review requires a current version of an Internet Browser or you can also Download the First Step Review and run it on your local computer. (NOTE: print and e-mail functions won’t work without an Internet Connection).  Please select “Next” below to complete an online version of First Step Review.

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The First Step Cash Flow Analysis spreadsheet shows how money will come in and go out of your business. This will indicate when your expenses are too high and help you determine if you should arrange short term investments to deal with cash flow surpluses. It will also highlight how much capital investment your business will need.

First Step Cash Flow Analysis

Value of this Forecast

An Operating Plan Forecast can yield multiple benefits to the small business owner. First, the Forecast is a valuable planning tool. Second, when the planning phase has been completed, the Forecast becomes a key management tool in controlling the business operations to achieve the results planned for.

As a Planning Tool ;— The Operating Plan Forecast enables the owner to develop a “preview” of the amount of profit or loss, which can be expected to be generated each month, for each quarter, and for the business year – based on reasonable predictions of monthly levels of sales, costs, and expenses. By having a “preview” of future operations the owner can compare, ahead of time, the years expected profit or loss against profit goals and needs established for the business. If the results as forecasted are not satisfactory, there is time to identify what must be done in order to achieve satisfactory results for the year.

As a Control Tool — A completed Forecast enables the owner-manager to compare the figures for the actual results, as they become known, with the estimated or “targets” projected for that month. Where the results are out of line, steps can be taken to correct undesired deviations. By being able to see quickly where the trouble is, less time and money will be lost in getting back on track towards overall profit goals.

First Step Profit & Loss Statement — Where to Begin

First Step Profit & Loss Statement — Sample Worksheet

First Step Profit & Loss Statement — Handbook

First Step Profit & Loss Statement — Worksheet

The First Step Balance Sheet shows the balances of assets, liabilities and owner's equity on a particular day. The balance sheet provides a snapshot of a business at an exact point in time - it shows the balances of the various accounts on the last day of the reporting period.

A projected balance sheet indicates the future financial health of your business. Using your First Step Projected Profit and Loss Statement and First Step Cash Flow Analysis Spreadsheets, you can project what your balance sheet will look at the end of your first year. Enter the amounts for each section of the balance sheet (assets, liabilities, and equity).

First Step Balance Sheet - with explanation

First Step Balance Sheet


The U.S. Small Business Administration participation in the Co-sponsorship Does not constitute an express or implied endorsement of the co-sponsor's opinions, products or services.