GEORGIA SBDC Hello, my name is... Mark Whipkey Business Consultant /

Agenda 1.Small Business Development Center (SBDC) 2.Business Plan Overview and Common Mistakes 3.Financial Statement Review 4.Financial Template for the Business Plan

But first…..a fun opportunity…. Georgia SBDC Network

FINISHED FILES ARE THE RESULT OF YEARS OF SCIENTIFIC STUDY COMBINED WITH THE EXPERIENCE OF MANY YEARS Georgia SBDC Network

Georgia SBDC Network: What We Do for Georgia’s Businesses! In Partnership with the U.S. Small Business Administration

GEORGIA SBDC NETWORK To enhance the economic well-being of Georgians by providing a wide range of educational services for small business owners and aspiring entrepreneurs. University of Georgia SBDC Georgia State University SBDC University of West Georgia SBDC Kennesaw State University SBDC Clayton State University SBDC Georgia Southern University SBDC Valdosta State University SBDC

GEORGIA SBDC NETWORK What we do –Consulting Free, Confidential one-on one –Continuing Education 2013 over 323 programs with 3,592 attendees –Client Success over past 5 years ( ) $299 million through loans and equity financing $7.2 billion in sales 1,427 new businesses starts 9,777 new jobs created

GEORGIA SBDC NETWORK What Services we Offer? -Capital Assistance  Business Planning, Financial Projections, Equity Analysis -Marketing Assistance  Marketing Plans, Research, Strategic Analysis -Accounting and Financial Management Record Keeping and Accounting Systems Ratio Comparison and Financial Analysis QuickBooks Assistance -HR & Business Management -International Trade

But first…..another fun opportunity…. The Business Plan

What is a Business Plan? A business plan is any plan that works for a business to help them….. Look ahead Allocate resources Focus on key points Prepare for problems and opportunities

Why do you need a business plan? It forces you to focus. It tests your commitment. It brings you down to reality. It gives you a benchmark. Required by lenders and investors.Required by lenders and investors.

The Business Plan Elements of a Good Plan Cover Page Executive Summary (Do Last) Executive Summary (Do Last) Mission Keys to Success Business Description Products and Services Market Analysis (SWOT) Marketing Strategy Competition Management & Personnel Operations (retail, internet, locations) Financial Plan Financial Plan Supporting Documentation

The Business Plan Four Ways to Ruin a Plan Too much “BLUE SKY” ◦ Failure to consider outside influences – competition, industry trends, economic environment. ◦ Lack of market research and industry analysis Unsubstantiated financial assumptions Outdated information Unprofessional appearance of plan – illogical format, spelling and grammatical errors

Good Business Plan Resource

But first…..another fun opportunity…. Financial Statements

Income Statement Balance Sheet Statement of Cash Flow Financial Statements

INDICATES HOW THE REVENUE ( ALSO KNOWN AS THE “ TOP LINE ”) IS TRANSFORMED INTO THE NET INCOME ( THE RESULT AFTER ALL REVENUES AND EXPENSES HAVE BEEN ACCOUNTED FOR, ALSO KNOWN AS N ET P ROFIT OR THE “ BOTTOM LINE ”) T HE IMPORTANT THING TO REMEMBER ABOUT AN INCOME STATEMENT IS THAT IT REPRESENTS A PERIOD OF TIME. T HIS CONTRASTS WITH THE BALANCE SHEET, WHICH REPRESENTS A SINGLE MOMENT IN TIME.

Financial Statements T HE BALANCE SHEET IS A SNAPSHOT OF A FIRM ’ S FINANCIAL RESOURCES AND OBLIGATIONS AT A SINGLE POINT IN TIME. GOVERNED BY THE ACCOUNTING EQUATION : A SSETS = L IABILITIES + O WNERS ’ E QUITY.

Financial Statements “CASH IS KING” T HE CASH FLOW STATEMENT IS A CASH BASIS REPORT ON THREE TYPES OF FINANCIAL ACTIVITIES : OPERATING ACTIVITIES, INVESTING ACTIVITIES, AND FINANCING ACTIVITIES. I T CAPTURES BOTH THE CURRENT OPERATING RESULTS AND THE ACCOMPANYING CHANGES IN THE BALANCE SHEET. A S AN ANALYTICAL TOOL, THE STATEMENT OF CASH FLOWS IS USEFUL IN DETERMINING THE SHORT - TERM VIABILITY OF A COMPANY, PARTICULARLY ITS ABILITY TO PAY BILLS. ( BANKRUPTCY )

Key Take Aways: –Balance Sheet is for a POINT IN TIME –Income Statement and Statement of Cash Flows Are for a PERIOD OF TIME –PROFIT does NOT equal cash –“CASH IS KING” Financial Statements