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The Successful Business Plan:

Secrets & Strategies
by Rhonda Abrams
Fourth Edition
Published by
The Planning Shop
Palo Alto, California
The Financials
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Numbers are merely
the reflection of
decisions you make
Key Financial Documents
Income statement (also called P&L)
Cash-flow projection
Balance sheet
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Other Financial Forms
Sources and use of funds
Break-even analysis
Start-up costs
Assumption sheet
Some Key Terms:
Gross sales total sales before any costs
Net sales sales after commissions and returns
Cost of goods (COG) cost of inventory,
materials
Gross profit -- income before operating
expenses
G & A operating & administrative expenses
Net Income/Net Profit income/profit after all
expenses/costs
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$25,000 NET PROFIT
($5,000) (Provision for Taxes)
$30,000 Net Income Before Taxes
($35,000) (Expenses)
$65,000 GROSS PROFIT
($23,000) (Cost of Goods)
$88,000 Net Sales
($12,000) (Commissions)
$100,000 GROSS SALES
Guidelines for
Preparing Financials
Be conservative
Be honest
Dont be creative
Get accountants advice
Follow industry practices
Choose appropriate accounting method
Be consistent
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Things take longer
and cost more than planned
Prepare the Financial
Worksheets
Enter figures from earlier worksheets (e.g.,
marketing budget, staffing costs) into
appropriate lines on each worksheet
If using Electronic Financial Worksheets,
all figures will automatically be entered
from one worksheet to appropriate line(s)
on Income Statement, Cash Flow, and
Balance Sheet worksheets
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Prepare the Staffing and
Professional Services Budgets
Enter the actual or anticipated expenses for staff
and consultants in each time period
If using the Electronic Financial Worksheets, the
Benefits line will automatically be calculated by
the amount entered in the Setup worksheet
If using the Electronic Financial Worksheets,
costs will automatically be entered on your
Income Statement and Cash Flow worksheets
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Prepare the Marketing Budget
Complete worksheet using known or
projected costs for each marketing activity
Indicate costs in the time period they are
anticipated to occur
If using the Electronic Financial
Worksheets, these numbers will
automatically be added to the Income
Statements and Cash Flow projections
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Prepare the Sales Projections
Enter the projected number of units in each
product line to be sold in each time period
Enter the unit cost of each product line
Enter commission and return rates
If using the Electronic Financial Worksheets,
commissions and returns will be calculated from
the Setup worksheet, and all projections will
automatically be added to Income Statements
and Cash Flow projections
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Start-Up Costs
Not included in Income Statement but
affect the amount of money needed to be
raised to start your business
IRS treatment some costs must be
depreciated over a number of years rather
than expensed in the first year of business
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Prepare the Start-Up Costs
Enter the actual or projected costs to get
your business underway
If using the Electronic Financial
Worksheets, some of these expenses will
automatically get transferred to the
Balance Sheet
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