June 27, 2008

Nail The Financials

Your business plan financials are imperative to your success if you are seeking money from lenders or investors. Your financials are what they will turn inside out as well as your executive summary the rest of the plan is just details and clarification.

Your financials should cover three different aspects: income statement, balance sheet, and cash-flow statement, each with numerous subsets.

Income Statement

The income statement basically shows how much profits or losses you expect to show at the end of the year. The easiest way to exhibit this for your lenders/investors is to break down your income statement by month. Income statments include revenues, expenses, cost of goods sold, gross profit, net profit, net profit before taxes, and net profit after taxes.

Balance Sheet

The balance sheet is an annual (meaning yearly) snapshot of your financials. A balance sheet includes current assets, liabilities, and equity.

Cash Flow Statement

Lastly is the cash flow projections. This financial statement can be hard to construct especially considering that you haven't started business yet, but it's important to work through so that your lenders/investors know how you are managing your money. Cash flow statement includes cash inflows, and cash outflows. Your cash flow projection will be your cash outflow subtracted from your cash inflow.

So there is a basic run down, please let me know if you have any questions about the financials or need further clarification.

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April 18, 2008

True Entrepreneurs Know How to Dream

I read an article the other day that made me think of those who are chasing their dreams. Entrepreneurs are people that never cease to amaze me. They seem to have this fire that grows and grows until it consumes everything and everyone around them. Entrepreneurs are people that know how to persist, work, and influence others. The article I read describes a few people that have worked insatiably to achieve their goal. The name of the show is Oprah's Big Give. In the show Oprah Winfrey gives many contestants money to give away to others. The contestants use that money the best way they can. The contestants win by making it through rounds and cuts. In the final round there are three contestants left, two of the three are small business owners.

In the first round contestants were given $4,800 to use to bless the lives of others. The first entrepreneur finalist is Cameron Johnson. Cameron used that money to raise more money for the Denver's Children's Home. While she was doing the she learned of a father who was diagnosed with cancer. With the bread-winner's health failing she decided to step in and give this family a boost. She worked her networks and was able to payoff the entire mortgage on their home with the help of some big investors - Ford Motor Co., the family's bank, and NASCAR driver Dale Earnhardt, Jr. She then was able to talk the bank into waiving the interest fees and to complete the paperwork in only four days!

In another round contestants were given $100,000 to use to serve others with. Another final entrepreneur contestant, Stephen Paletta, was the only contestant to meet the challenge. He bought a truckload of consumer electronic gear, visited a poverty stricken neighborhood and went door to door distributing the electronic goods. In the semifinal round of the show Stephen was able to raise $43,000 for a local women's shelter by using his network of family and friends. He was also able to engineer specific help to a family that has a child with cancer by securing rental payments for their apartments for a year, decorating the child’s room in pink and white, and talking four car dealerships into paying for a brand new car.

As I read these stories/accomplishments I wasn't very surprised. For the past few years I have worked as an entrepreneur and have worked with numberless entrepreneurs and all true entrepreneurs have the same thing in common - desire. True entrepreneurs establish a vision that becomes their mission. They become obsessed with making their mission a reality and they'll work through night or talk to everybody they know or don't know just to gather the resources and the help to make their vision become a reality. This entry is dedicated to the true entrepreneurs to those who do not know how to give up; my hat goes off to you. Thank you.

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March 20, 2008

Mentors, Templates to Help You Perfect Your Business Plan

For the last two months I have worked closely with a mentor in writing a business plan for a venture in the developing world. Mentors can make the world of a difference when a business plan is so foreign to you. It was nice to have someone with fresh eyes look it over after I had worked so much on it that it was almost impossible for me to see the flaws. Those fresh views help a ton! Another helpful thing is to have some kind of a template or guide.

Continue reading "Mentors, Templates to Help You Perfect Your Business Plan"

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January 25, 2008

Econcomic Stimulus Plan To Stimulate Your Business

Well, I think are news feeds are flooding with recession, unemployment, and now the recent economic stimulus plan presented by the White House. To sum up the economic stimulus plan, basically $150 billion for about 117 million American families by spring. The plan will also include $50 billion in tax incentives for business, mostly through faster tax write-offs of investments.

With that said, what would you do with it? I asked three other people and these were the answers they gave me.

1. "I would put it all into paying rent and my debts."

2. "Finish paying off the credit card debt, put the rest in investment. I have no desire to buy luxury goods at this time in my life; and I have a difficult time believing the bases of our economy is dependent upon idiots buying a bunch of crap."

3. Off the top of my head, I think I would invest it."

I thought that it was interesting that 2 of the 3 mentioned paying off debts, meaning they if the economy does take a dive they want to be as far out of debt as possible. The stimulus will be implemented to so that people will spend it and stimulate the economy, but if people hold onto it or just pay-off their debts the stimulus may be a little too late.

Personally, I think a recession is one of the greatest times to do business. I plan on aggressively moving forward to grow my assets. I've seen many people that begin gobbling up stocks, real estate, and starting small business--all because the recession affords them an opportunity to get into the mix. As we move forward and into a possible certainty be sure to take the time and research the different opportunities that are out there.

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