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.
Revenue forecasting is a form of predicting the future – which makes it intimidating, and may be why so many entrepreneurs hazard wild guesses to get it over with quickly. But using sales and marketing activity and industry research as the basis for your revenue model will transform it into a useful tool for tracking performance and staying on top of your cash flow. Accompanied by detailed downloadable worksheets, this learning stream will help you develop revenue models that are understandable, accurate, and actionable.
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.
Given that 8 in 10 business failures can be attributed to poor cash management, tracking how much cash is coming in and going out is crucial to startup success. In this learning stream, you'll build a sound cash flow model that will serve as a benchmark as you launch and work toward profitability.
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.