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Overview, Learning Objectives, Class Preparation

Business Plan- Start-up Cost and Financing
Projected Financial Statements

OVERVIEW

This section identifies common start-up costs and discusses the need for adequate working capital.  Debt and equity sources of financing are then provided.

This section provides an overview of the opening day balance sheet, projected income statements, and cash flow projection.  It also discusses the common accounting methods and the effect on the financial statements.

LEARNING OBJECTIVES

• To comprehend the difference between start-up costs and ongoing expenses.
• To be able to list common start-up costs. 
• To be aware of the different sources of financing. 
• To understand the difference between debt and equity financing. 
  
• To understand the different methods of accounting. 
• To be able to prepare an opening day balance sheet. 
• To be able to prepare a projected income statement. 
• To comprehend the concept of cash flow and be able to complete a projected statement of cash flows. 
• The income statement for a corporation and a proprietorship are different because the owners’ salaries are recorded differently.
• A cash flow projection estimates cash coming into the business and cash paid out; profitable businesses may still have cash shortages due to seasonal fluctuations and amounts due from customers that have not been collected.

Format for Discussion Questions: Typed, (Question in bold) followed by your answer. May be submitted in class paper copy, email, or Blackboard.

READ Business Plan Start-up Cost and Financing and Projected Financial Statements pg208-233

Fill out the Checklist and bring them to class.  We will discuss your work.

Be prepared to discuss your answers in class.

Power Point Slides