Post on 03-Jun-2018
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The Successful Business Plan:Secrets & Strategies
by Rhonda Abrams
Fourth Edition
Published by
The Planning Shop
Palo Alto, California
The Financials
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Numbers are merely
the reflection of
decisions you make
Key Financial Documents
Income statement (also called P&L)
Cash-flow projection
Balance sheet
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Other Financial Forms
Sources and use of funds
Break-even analysis
Start-up costs
Assumption sheet
Some Key Terms:
Gross sales total sales before any costs
Net sales sales after commissions and returns
Cost of goods (COG) cost of inventory,materials
Gross profit -- income before operatingexpenses
G & A operating & administrative expenses Net Income/Net Profit income/profit after all
expenses/costs
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$25,000NET PROFIT
($5,000)(Provision for Taxes)
$30,000Net Income Before Taxes
($35,000)(Expenses)
$65,000GROSS PROFIT
($23,000)(Cost of Goods)
$88,000Net Sales($12,000)(Commissions)
$100,000GROSS SALES
Guidelines forPreparing Financials
Be conservative
Be honest
Dont be creative
Get accountants advice
Follow industry practices Choose appropriate accounting method
Be consistent
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Things take longer
and cost more than planned
Prepare the FinancialWorksheets
Enter figures from earlier worksheets (e.g.,marketing budget, staffing costs) intoappropriate lines on each worksheet
If using Electronic Financial Worksheets,all figures will automatically be enteredfrom one worksheet to appropriate line(s)on Income Statement, Cash Flow, andBalance Sheet worksheets
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Prepare the Staffing and
Professional Services Budgets Enter the actual or anticipated expenses for staff
and consultants in each time period
If using the Electronic Financial Worksheets, theBenefits line will automatically be calculated bythe amount entered in the Setup worksheet
If using the Electronic Financial Worksheets,costs will automatically be entered on your
Income Statement and Cash Flow worksheets
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Prepare the Sales Projections
Enter the projected number of units in eachproduct line to be sold in each time period
Enter the unit cost of each product line
Enter commission and return rates
If using the Electronic Financial Worksheets,commissions and returns will be calculated from
the Setup worksheet, and all projections willautomatically be added to Income Statementsand Cash Flow projections
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Start-Up Costs
Not included in Income Statement butaffect the amount of money needed to beraised to start your business
IRS treatment some costs must bedepreciated over a number of years ratherthan expensed in the first year of business
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Prepare the Start-Up Costs
Enter the actual or projected costs to getyour business underway
If using the Electronic FinancialWorksheets, some of these expenses willautomatically get transferred to theBalance Sheet
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