Budget and Finance Part I BCS-BE-26: The student explains the process in developing a budget. BCS-BE-27: The student analyzes the financial statements of a business and utilizes those statements to make important business decisions. BCS-BE-28: The student identifies financial aspects associated with opening a business. BCS-BE-29: The student completes records which are fundamental for any business.

The Purpose of the Financial Plan A _______can be used to attract investors. financial plan a set of documents that outlines the ______financial facts about a new venture Financial plans project the ______of a new business or a project at an existing firm.

Characteristics of an Effective Financial Plan Graphic Organizer Characteristics of an Effective Financial Plan Identifies the assets that need to be ______ Describes the amount of _____ a business needs to start and operate Describes the ______the business will incur and explains how a business will cover its expenses Describes how the business will _____ and report financial records Forecasts finances to project future _______ Explains how the _____ will acquire money to grow or expand

Identifying Business Assets _____ about assets might show that buying used _____ instead of new ones, or renting them, would be best. Examples of Assets Cash ______ Buildings ______ Inventory ______

Determining Needed Capital A financial plan ____that amount of capital a business will ___. capital money ____by investors, banks, or owners of a business

Determining Needed Capital Start-up capital is the _____used to pay for the various ____and expenses of a new venture or _____. A start-up may have a hard time ____investors because it has no track record.

Describing Start-Up and Operating Expenses Start-up expenses often ____a large amount of ____.

Examples of Start-Up Expenses Examples of Operating Expenses Graphic Organizer Examples of Start-Up Expenses Examples of Operating Expenses Business ______ Remodeling costs Security _____ Advertising _____ Supplies Legal _______ Licenses _____ Rent ______bills Delivery charges Bank _______

Describing Financial Records Management A financial _____describes who will maintain the financial records and why. A financial plan also describes any ____agreements that influence the way records are kept. Special _____software is available to businesses.

Forecasting Future Finances A financial forecast should be _____in its outlook. financial forecast an estimate of a business’s _____outlook for each of the next few years A forecast should consider changes in the _____.

Describing Growth Financing Planned ___can be rewarding, while unplanned growth can be _____. Investors want to know that a ______has thoughtfully developed strategies to finance controlled growth.

A budget helps guide a _____future. Budgets A budget helps guide a _____future. budget a plan specifying how _____will be used or spent during a particular period

Graphic Organizer Three Types of Budgets _____ Budget _____ Budget A plan for your income and expenses from the time you start a business to estimated time it will make a profit A plan for the actual money the business owner spends on a daily, weekly, or monthly basis A plan for the amount expected to be spent and earned over a given period of time, usually six months or a year