I need help gathering ideas and writing my final. I only need around 300 words for each of the 3 question blocks. My final paper is a 4500 word paper about starting a construction company.
1. Why is developing a financial plan an important part of the entrepreneur's planning process? What are the basic financial statements and how are these basic financial statements prepared and used in managing a small business?
2. What are some benefits and difficulties of the big three of cash management? What techniques may an entrepreneur use to avoid a cash crisis?
3. What are the types of capital a small business needs for operation? Describe difficulties entrepreneurs face when raising capital needed to start, operate, and expand a business. Use your text as the reference in answering this question.
1. For starters, to secure funding or credit, a business plan is required. For the business owner, creating a business plan helps to identify strategies for success. This is because a business plan has to identify a target market and provide evidence that there is a demand in that market in the location of the business. It also includes pro forma financial statements. These three major financial statements are the 1. Income Statement 2. Balance sheet 3. Statement of Cash flows. Pro forma means "future expectations". What numbers would you reasonable expect to appear at the end of the first operating year. In an area such as construction, it is possible to project more than one year based on what you know about the economy, industry, and market to project year over year growth.
The Income Statement. this statement is usually prepared at the end of each accounting period (often monthly or quarterly) and records income, expenses, taxes etc to determine how well the company is operating in terms of profitability.
The Balance sheet is also reported at the end of an accounting period but is regarded as a "snapshot" of the company as it can change from day to day ...
This post gives thourough information about what a business plan is, who uses it and why they are important. Descriptions of what is included in a business plan includes the importantance of financial statements.