What steps should an entrepreneur take to obtain and maintain adequate financial resources? What is most important, obtaining or maintaining financial resources? Why?
The first step for any potential business opportunity is to develop a comprehensive and thorough business plan. The plan should include financial projections, marketing and sales projections, staffing projections, as well as the ability to present practical and realistic projections for future returns.
Within the forecast, there should also exist pro forma financial statements, which will detail facts and figures designed to present an honest representation of the future of the firm, as well as its ability to create value over the investment cycle. There also needs to be a realistic presentation of the funding available, as well as the amount of funding needed in order not only to begin the enterprise, but also to sustain it over a set period of time. As a part of this projection, it will be critical to forecast cash requirements for sustaining the firm over a period of time. This includes the amount of cash needed for everyday transactions, ...
Business firms need to obtain and maintain financial resources not only to establish the business, but also to sustain the firm over a period of time. Financial resources are important in order to provide a source of funding, to provides a source of contingency funding in case of emergencies, and to obtain a source of funding in order to take advantage of investment opportunities. This is a road map for this process.