1. FINANCE, PROTECT, AND INSURE YOUR BUSINESS
Entrepreneurship
11/7/2018
Chapter 7
FINANCE, PROTECT, AND INSURE YOUR BUSINESS
7.1 Put Together a Financial Plan
7.2 Obtain Financing for Your Business
7.3 Protect Your Business
7.4 Insure Your Business
Chapter 7

2. Lesson 7.1 PUT TOGETHER A FINANCIAL PLAN
Chapter 7
Lesson 7.1 PUT TOGETHER A FINANCIAL PLAN
GOALS
Calculate your start-up costs.
Create a cash flow statement, an income statement, a balance sheet, and a personal financial statement.

3. PREPARE FINANCIAL STATEMENTS
Chapter 7
PREPARE FINANCIAL STATEMENTS
List of start-up costs
Cash flow statement
Income statement
Balance sheet
Personal financial statement

4. Chapter 7
START-UP COSTS
Start-up costs are the one-time-only expenses that are paid to establish a business.
Common start-up costs include:
Equipment and supplies
Furniture and fixtures
Vehicles
Remodeling
Legal and accounting fees
Licensing fees

5. Chapter 7
CASH FLOW STATEMENT
A cash flow statement describes how much cash comes in and goes out of a business over a period of time.
Forecast revenues
Forecast operating expenses
Prepare the cash flow statement
Best and worst case

6. Chapter 7
INCOME STATEMENT
An income statement is a financial statement that indicates how much money a business earns or loses during a particular period.
Also known as a profit and loss statement
Difference from a cash flow statement

7. BALANCE SHEET Types of assets Types of liabilities
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BALANCE SHEET
Types of assets
Types of liabilities
Uncollectible accounts
Depreciation

8. PERSONAL FINANCIAL STATEMENT
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PERSONAL FINANCIAL STATEMENT
A personal financial statement is a balance sheet of your holdings.
It shows your personal assets, liabilities, and net worth.

9. Lesson 7.2 OBTAIN FINANCING FOR YOUR BUSINESS
Chapter 7
Lesson 7.2 OBTAIN FINANCING FOR YOUR BUSINESS
GOALS
Consider different types of bank loans.
Explain Small Business Administration loans.
Evaluate other sources that can provide debt capital.

10. BANK LOANS Types of bank loans Types of secured loans Secured loans
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BANK LOANS
Types of bank loans
Secured loans
Unsecured loans
Types of secured loans
Line of credit
Short-term loan
Long-term loan

11. REASONS A BANK MAY NOT LEND MONEY
Chapter 7
REASONS A BANK MAY NOT LEND MONEY
The business is a start up
Lack of a solid business plan
Lack of adequate experience
Lack of confidence in the borrower
Inadequate investment in the business

12. SMALL BUSINESS ADMINISTRATION LOANS
Chapter 7
SMALL BUSINESS ADMINISTRATION LOANS
SBA loan assistance
Requirements of SBA loans
Apply for an SBA loan

13. REQUIREMENTS OF SBA LOANS
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REQUIREMENTS OF SBA LOANS
Your business must be considered a small business.
Your business must not be the leader in its field.
Your business must comply with all federal employment laws.
Your business cannot create or distribute ideas or opinions.
You must have been unable to obtain financing from a commercial bank.
You must invest a reasonable amount of your own money in the venture.
You must provide adequate collateral.

14. OTHER SOURCES OF LOANS Small Business Investment Companies—SBIC
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OTHER SOURCES OF LOANS
Small Business Investment Companies—SBIC
Minority Enterprise Small Business Investment Companies—MESBIC
Department Of Housing And Urban Development—HUD
Economic Development Administration—EDA
State governments
Local and municipal governments

15. FINANCE YOUR BUSINESS WITH EQUITY CAPITAL
Chapter 7
FINANCE YOUR BUSINESS WITH EQUITY CAPITAL
Equity capital is money invested in a business in return for a share in the business’s profits.
Sources of equity
Personal financing
Friends and family
Venture capitalist

16. Lesson 7.3 PROTECT YOUR BUSINESS
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Lesson 7.3 PROTECT YOUR BUSINESS
GOALS
Categorize business risk.
Identify security precautions to protect your business from different types of theft.

17. Chapter 7
BUSINESS RISK
Human risks
Natural risks
Economic risks

18. Chapter 7
SHOPLIFTING
Shoplifting is the act of knowingly taking items from a business without paying.
Customers shoplift millions of dollars in merchandise every year.

19. Chapter 7
EMPLOYEE THEFT
Procedures for preventing and detecting employee theft include:
Prevent dishonest employees from joining your company.
Install surveillance systems.
Establish a tough company policy regarding employee theft.
Be on the lookout.

20. OTHER TYPES OF THEFT Robbery Credit card fraud Bounced checks
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OTHER TYPES OF THEFT
Robbery
Credit card fraud
Bounced checks

21. Lesson 7.4 INSURE YOUR BUSINESS
Chapter 7
Lesson 7.4 INSURE YOUR BUSINESS
GOALS
Determine the different types of insurance you may need for your business.
Purchase insurance.

22. CLASSIFICATION OF RISK
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CLASSIFICATION OF RISK
Result of the risk
Control of the risk
Insurability of risk

23. TYPES OF INSURANCE Property insurance Casualty insurance
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TYPES OF INSURANCE
Property insurance
Casualty insurance
Life insurance
Workers’ compensation
Other kinds of insurance

24. BUY INSURANCE Choose an insurance agent
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BUY INSURANCE
Choose an insurance agent
Determine how much coverage you need