Making money is the very reason your business exists – but often, entrepreneurs don't pay enough attention to the financials that drive the bottom line. Sound financial planning documents can not only win over investors; they're valuable tools for monitoring the company's progress toward profitability. In this learning stream, we'll examine and counteract common misperceptions about financial planning, learn about different models for revenue and cost projections, and use worksheets to build the statements that matter most.
`Don't be one of those businesses that stalls on the runway due to bad cash flow management (it has happened to the best of entrepreneurs). Instead, commit to understanding the key principles of small business financials and comfortably master that money side of your business. In this learning steam, you'll grasp the key fundamentals of managing the finances of your business—from the basic underpinnings of sound planning to key financial statements like your P&L and cash flow and financial models like staffing, revenue, and expenses.
The income statement, or P&L, is the financial report investors will scrutinize the most – and with good reason: it's where all your projections and calculations are summarized to tell the story, in numbers, of how your business will make money. This learning stream will help you bring everything together to develop a P&L that's accurate and convincing.
The success of your business depends on the people you employ, and preparing to bring the right talent on board just when you need it will be crucial to a successful launch and ongoing growth. With a sound staffing plan, you can forecast personnel costs, prevent turnover, balance contractor versus staff hires, and predict ROI for positions across the organization. Along with the accompanying spreadsheet tool, this learning stream will help you develop a staffing plan that matches your talent needs with the right personnel at the right time.
"Where did all the money go?" may be a common refrain when paying the monthly household bills, but expenses should never be a mystery when you're launching a business. A thorough understanding of costs is essential to keep track of cash flow, as well as to set appropriate pricing to achieve eventual profit. Armed with an accurate expense model, you'll not only build solid financials for your business plan you'll also build yourself an insurance policy against overspending.