Small Business Financial Planning

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Multiply this number by 6, and you have a six-month estimate of your operating expenses.

Adding this amount to your total startup expenses list, and you have a ballpark figure for your complete start-up costs.

Terry Elliott's article, 3 Methods of Sales Forecasting, will help you avoid this and provides a detailed explanation of how to do accurate sales forecasting for your cash flow projections.

For your business plan, you should create a pro forma balance sheet that summarizes the information in the income statement and cash flow projections.

Think of your business expenses as two cost categories; your start-up expenses and your operating expenses.

All the costs of getting your business up and running should be considered start-up expenses.The current month's revenues are added to this balance; the current month's disbursements are subtracted, and the adjusted cash flow balance is carried over to the next month.When building your cash flow projection, a common pitfall is being over-optimistic about your projected sales.The financial statements themselves (the income statement, cash flow projections, and balance sheet) should be placed in your business plan's appendices.Most people wouldn’t embark on a long journey without a plan.This article will guide you in the preparation of each of these three financial statements.Before you begin, however, you must gather the financial data you will need including all of your expenses.A business typically prepares a balance sheet once a year.Once again, this template is an example of the different categories of assets and liabilities that may apply to your business.Once your balance sheet is complete, write a brief analysis for each of the three financial statements.The analysis should be short with highlights rather than in-depth analysis.

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