SESSION 8 DEVELOPING YOUR BUSINESS PLAN - 2 by localgirl

VIEWS: 11 PAGES: 11

									SESSION 8: DEVELOPING YOUR BUSINESS PLAN - 2

BUSINESS PLANNING FOR SMALL BUSINESSES COURSE APRIL 2-4, 2007

SESSION OBJECTIVE

“Tell Your Story” - How to describe your financials and forecasting, and budgeting

WHAT FINANCIAL STATEMENTS?
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What’s important?
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Income Statement: How much your company earned and spent over a specific time period up till when the report was prepared: • Revenues over time - all costs over same time = Net Profit • Sometimes called “earnings reports” or “Profit and Loss” Statements Balance Sheet: “Snap-shot” of business at a particular moment – month-end, year-end • Shows all Assets and all liabilities • Assets and Liabilities have to balance Cash-Flow Statement: Report tracks money in and out of the business over a given time period and associated changes in cash holdings



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Source: Tiffany/Peterson, “Business Plans For Dummies”

SAMPLE INCOME STATEMENT

SAMPLE INCOME STATEMENT
COMPANY INCOME STATEMENT
INCOME STATEMENT AS OF: DECEMBER 31

Last Year: Revenue from in-store sales Revenue from Catalogue goods Gross Revenue Cost of goods sold Gross Profit
Sales, general, and administration

Previous Year: 595,000 95,000 $ 690,000 –445,000 $245,000 –108,000 –20,000 $117,000 +3,000 –25,000 $95,000 –19,000 $76,000

624,000 + 105,000 $ 729,000 –448,000 $281,000 –126,000 –20,000 $ 135,000

+

Depreciation expense Operating Profit

Dividend and interest income Interest expense Profit Before Taxes Taxes Net Profit

+3,000 –24,000 $114,000 –22,000 $92,000

SAMPLE BALANCE SHEET STATEMENT

SAMPLE BALANCE SHEET STATEMENT
COMPANY BALANCE SHEET
BALANCE SHEET ON DECEMBER 31

Assets 1 Current Assets Cash Investment portfolio Accounts receivable Inventories Prepaid expenses Total Current Assets 2 Fixed Assets Land Buildings Equipment Accumulated depreciation Total Fixed Assets 3 4 Intangibles (goodwill, patents) TOTAL ASSETS (add totals 1-3)

Last Year:

Previous Year:

+ 45,000 + 20,000 + 15,000 +110,000 + 1,000 $191,000

+ 36,000 + 17,000 + 18,000 + 97,000 + 1,000 $ 169,000

+100,000 +295,000 + 15,000 – 65,000 $345,000 $10,000 $546,000 Last Year:

+ 100,000 + 295,000 + 10,000 - 45,000 360,000 10,000 $ 539,000 Previous Year:

Liabilities and Owners’ Equity 5 Current Liabilities Accounts payable Accrued expenses payable Total Current Liabilities 6 Long-term Liabilities Building mortgages Total Long-term Liabilities 7 Owners’ Equity Invested capital Accumulated retained earnings Total Owners’ Equity TOTAL LIABILITIES and EQUITY

+ 4,000 + 12,000 $16,000

+ 6,000 + 11,000 $17,000

+210,000 $210,000

+214,000 $214,000

+200,000 +120,000 $320,000

+195,000 +113,000 $308,000

8

$546,000

$539,000

WORKING CAPITAL – THE MONEY THAT KEEPS YOU UP AND RUNNING

Working Capital = Current Assets – Current Liabilities

SAMPLE CASH-FLOW STATEMENT

SAMPLE CASH-FLOW STATEMENT
COMPANY CASH FLOW STATEMENT
CASH FLOW AS OF DECEMBER 31

Inflow and Outflow 1 Funds Provided By: Receipts from in-store sales Receipts from catalogue sales Dividend and interest income Invested capital Total Funds In 2 Funds Used For: Cost of goods acquired
Sales, general, and administration

Last Year:

Previous Year:

626,000 + 106,000 + 3,000 + 5,000 $740,000

5696,000 + 96,000 + 3,000 + 10,000 $ 705,000

Interest expense Taxes Buildings and equipment Long-term debt reduction Distributions to owners Total Funds Out 3 NET CHANGE IN CASH POSITION (Total Funds In – Total Funds Out)

+461,000 +127,000 + 24,000 + 22,000 + 5,000 + 4,000 + 85,000 $728,000

+442,000 +109,000 + 25,000 + 19,000 + 1,000 + 3,000 + 65,000 $664,000

$12,000

$41,000

Changes By Account 4 Changes in Liquid Assets: Cash Investment portfolio Total Changes NET CHANGE IN CASH POSITION (Total Funds In – Total Funds Out)

Last Year:

Previous Year:

+9,000 +3,000 $12,000

+28,000 +13,000 $41,000

5

$ 12,000

$ 41,000

OUR BUSINESS PLAN – SO FAR
Table of Contents Executive Summary: Summary of Key Points Company Overview: Company description; nature of business; Mission and Vision statements;
values; products/services ;uniqueness; new business opportunities

Business Environment: Industry Analyses; direct/potential competitors; customer profile: who they
are what they want and how they buy

Company Description: management team; organization; New/proprietary technology;
products/services; operations; marketing potential and competitive advantage

Company Strategy: Future “road-map”; “SWOT” Analyses Marketing Plan: reaching prospects; making sales; developing loyal customers.

Financial Review: Current and Future Financial Performance; income statements; balance sheets;
cash flow statement

Action Plan: Steps in implementation
Appendices: Supporting detailed information: analyses; reports; legal docs; product specs. etc


								
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