Mrs. Alexander-Harrison Entrepreneurship Financial Plan Mrs. Alexander-Harrison Entrepreneurship

Financial Statements Common start-up costs Equipment and supplies A list of start-up costs, one time expenses paid to establish a business Common start-up costs Equipment and supplies Furniture and fixtures Vehicles Remodeling expenses Legal and accounting fees Licensing fees

Cash Flow Statement Revenue – the amount of cash coming in A cash flow statement describes how much cash comes in and goes out of a business Revenue – the amount of cash coming in Expenses – the amount of cash going out Operating expenses – monthly expenses incurred by a business

Income Statement An income statement indicates how much money a business earns or loses in a particular period An income statement is also known as a profit and loss statement An income statement shows revenues not yet collected and expenses not yet paid

Assets = Liabilities + Owner’s Equity Balance Sheet Balance Sheet -Shows what a business owns, owes, and how much it’s worth at a point in time Based on the accounting equation Assets = Liabilities + Owner’s Equity Assets are items of value owned by the business such as Cash Equipment Inventory

Balance Sheet Liabilities are items that the business owes to others, such as Loans Outstanding invoices Owner’s equity is the value of all assets less all liabilities

Assets = Liabilities + Owner’s Equity Accounting Equation The balance sheet is base on an equation called the accounting equation Assets = Liabilities + Owner’s Equity

Supply & Demand Supply Demand Is how much of a good or service a producer is willing to produce at different prices. Demand Is an individual’s need or desire for a product or service at a given price

Equilibrium Price & Quantity Equilibrium price and quantity is the price at which supply equals demand

Fixed Costs Fixed costs are costs that must be paid regardless of how much of a good or service is produced. Examples of fixed costs include: Rent Insurance fees Interest on loans

Variable Costs Variable costs are costs that go up and down depending on the quantity of the good or service produced. Examples of variable costs include: Raw materials Labor Overhead directly related to producing goods or services.

Financing For Your Business Bank Loans Secured—guaranteed with collateral Unsecured—no collateral needed Equity Capital Personal financing Friends and family Venture capitalists

Financing For Your Business SBA Loans Other Loan Sources Small Business Investment Companies Minority Enterprise Small Business Investment Companies Department of Housing and Urban Development (HUD) The Economic Development Administration State Governments Local and Municipal Goverments

Shoplifting To prevent shoplifting: Instruct your employees to watch for customers who appear suspicious Post signs indicating that you prosecute shoplifters Ask customers to leave their bags behind the counter Install electronic devices, such as video cameras, electronic merchandise tags, and point-of-exit sensors that detect shoplifters

Shoplifting To prevent employee theft: Prevent dishonest employees from joining the company Install surveillance systems Establish a tough company policy regarding employee theft Be on the lookout

Types of Insurance Casualty Insurance Life Insurance Property Insurance Insures all business property against normal risks, including fire, robbery, and storm damage. Casualty Insurance Protects a business against lawsuits Life Insurance Pays out in the event that the holder of the policy dies

Types of Insurance Other Insurance Workers’ Compensation Consists of payments to workers who are injured on the job Other Insurance Includes coverage for floods, business interruption, crime and renter’s needs