University of Georgia Small Business Development Center David Dunn Financial Forecasting Maximizes Business Success

Introduction Background The Financial World has Changed Startup vs. Existing Businesses

Complexity vs. Simplicity Why complicate it? Simpler financial forecasting is good for: –Managers –Lenders –Others (CPA’s, consultants, etc.)

Overview of Spreadsheets Gazillions of forecasting spreadsheets Many (IMHO) are overly complicated Many utilize several sheets My spread sheet –Direct input –One sheet –Produces P/L, CF, BE, & BS

Assumptions are the Backbone Mandatory for comprehension of forecast –Spreadsheet assumptions Should address all substantial financial events –Sales –COGS –Major or unusual expenses –Cash Collection terms –Loan terms

Forecasting Revenue/Expenses: It isn’t Magic Situation dictates ways to forecast Sales can be tough –Use historical info –Household Spending Guide –Inventory Turnover Cost of Goods Sold – Ind. Norm. Research the expenses Conservative Use Common Sense

Cash Flow Where Does It Come From? Where Does It Go? Cash is King Help clients see cash movement Tied to income statement & balance sheet Timing of collections View balance as the checking account Uh-Oh, I’m seeing red!

Breakeven Analysis the Easy Way There it is Cost of Goods Sold What about adjustments?

Balance Sheet Sums It Up Often overlooked (avoided?) Importance P/L and cash flow impact

Case Study Brandylyn Enterprises The research Building the case The output

What if... Happens? The best laid plans of mice and men.. Impact analysis Several scenarios

Wrapping It Up One page format saves time, is easier to understand & explain, & is easier to follow. Results please lenders, investors, etc. & give owners the tools to better understand their business. Don’t make it harder than it is. Let your Small Business Development Center help you.

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