Submit A Rough Draft Of Your Course Project Financial Plan

Submit a rough draft Financial Plan for your Course Project

Read Chapter 6 of the “Pinson” textbook; read Chapter 16 of the “Abrams” textbook. M4S2 Read Section IX & X of the SCORE Start-up Business Plan. Attached Files: Business_Plan_for_a_Startup_Business_PDF.pdf (733.653 KB). M4S3 Research the following topics using the IRSC Library and other resources: Profit & Loss Projections; Projected Cash Flow Statement; Opening Day Balance Sheet; Break Even Analysis. M4S4 Study Quiz 4 Review. M4S5 Explore other resources. Use the “Assumption Sheet” (page ) and other applicable worksheets in Chapter 16 from the “Abrams” textbook, as well as the appropriate area of the “Pinson” textbook and the SCORE plan as a resource, to complete the following financials: Start-up Expenses Pro-forma Profit & Loss Form (36 mo.) Projected Cash Flow Statement (36 mo.) Projected Balance Sheet (36 mo.) Break Even Analysis. Review the Project Assignment Rubric before submitting.

Paper For Above instruction

Creating a comprehensive financial plan is a critical component for the success of a startup business. This paper synthesizes the necessary financial documents, including start-up expenses, profit and loss projections, cash flow statements, balance sheets, and break-even analysis, by utilizing relevant textbooks, resources, and financial worksheets.

The foundational step involves thoroughly understanding the startup costs. These costs are outlined in the “Assumption Sheet” from the Abrams textbook, which provides a detailed estimate of initial investments necessary to launch the business. Costs typically encompass equipment, inventory, permits, licenses, marketing startup costs, and initial working capital. Accurate estimation of these expenses ensures a solid base for financial projections and is critical for securing funding and managing liquidity (Brigham & Ehrhardt, 2016).

Next, the profit & loss (P&L) projection, spanning 36 months, offers insights into anticipated revenues, cost of goods sold (COGS), gross profit, operating expenses, and net profit. The P&L helps evaluate the profitability trajectory and informs strategic decisions (Higgins, 2018). Using the “Pinson” textbook and the worksheets provided, such as the Profit Projection for three years, enables detailed forecasting based on realistic assumptions about sales growth, pricing strategies, and cost management.

Cash flow projections are equally important, especially for startups where cash liquidity is vital. A 36-month projected cash flow statement, derived from the “Pinson” and “Abrams” textbooks, illustrates monthly cash inflows and outflows, highlighting periods of potential cash shortages. Effective cash flow management ensures the company can meet its obligations without interruption (Ross, Westerfield, & Jordan, 2018). The Excel worksheet “3-Year_Cash_Flow_Projections.xls” facilitates precise calculations and scenario planning, thereby enhancing the business’s financial resilience.

The projected balance sheet, compiled from the relevant worksheets and textbooks, provides a snapshot of assets, liabilities, and owner’s equity at the start and end of the three-year period. It offers transparency, showing how the business’s financial position evolves over time, and assists in assessing solvency and financial health (DeFusco, McLeavey, Pinto, & Runkle, 2015). Ensuring accurate projections requires careful categorization of assets such as inventory, receivables, and fixed assets, and liabilities like loans and payables.

Break-even analysis determines the sales volume needed to cover all fixed and variable costs, thus identifying the point where the business neither profits nor loses. Utilizing the “Breakeven_Analysis2.xls” worksheet, along with insights from the textbooks and SCORE plan, helps entrepreneurs set realistic sales targets and develop strategies to reach profitability (Garrison, Noreen, & Brewer, 2018). This analysis is vital for risk management and strategic planning.

Throughout this process, it is essential to critically analyze the assumptions underpinning each financial projection. Regularly referring back to the SCORE plan and consulting with the IRSC Library and credible sources such as Entrepreneur Magazine, Inc., and Fast Company enriches the accuracy and relevance of these forecasts (Gibson & Cassar, 2020). Understanding the interdependencies between cash flow, profitability, and financial position allows entrepreneurs to make informed decisions and adjust projections with emerging market realities.

Finally, integrating all these components into a cohesive financial plan provides a roadmap for managing the startup’s financial resources effectively. This plan supports ongoing business planning, investment decisions, and lender negotiations, ultimately contributing to the startup’s sustainability and growth. Regular review and revision of the financial plan, aligned with actual performance data, ensure that the business remains adaptable and financially sound over time.

References

• Brigham, E. F., & Ehrhardt, M. C. (2016). Financial Management: Theory & Practice (15th ed.). Cengage Learning.
• DeFusco, R. A., McLeavey, D. W., Pinto, J. E., & Runkle, D. E. (2015). Quantitative Investment Analysis (2nd ed.). CFA Institute Investment Series.
• Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2018). Managerial Accounting (16th ed.). McGraw-Hill Education.
• Gibson, B., & Cassar, G. (2020). Entrepreneurial Finance: Opportunities in Small Business Financing. Routledge.
• Higgins, R. C. (2018). Analysis for Financial Management (11th ed.). McGraw-Hill Education.
• Ross, S. A., Westerfield, R., & Jordan, B. (2018). Fundamentals of Corporate Finance (12th ed.). McGraw-Hill Education.
• Pinson, L. (2017). Financial Statements: A Step-By-Step Guide to Understanding and Creating Financial Reports (4th ed.). University of California Press.
• Abrams, R. J. (2010). The Successful Business Plan: Secrets & Strategies (3rd ed.). The Planning Shop.
• SCORE. (n.d.). Start-up Business Plan Sections IX & X. Retrieved from https://www.score.org/resource/startup-business-plan
• Entrepreneur Media. (2023). Small Business Finances: How to Build a Financial Plan. Entrepreneur.