The Business Plan For Homebased Business
By Carol Eliason Research Management Corporation Falls Church, Virginia
Introduction
Homework has taken on new meaning for more than 10 million Americans. The drive for economic self-sufficiency has motivated large numbers of persons to market their skills and talents for profit from home. More than 400,000 persons launched home enterprises in 1985. Our increasingly service oriented economy offers a widening spectrum of opportunities for customized and personalized small business growth.
Though untrained entrepreneurs have traditionally had a high rate of failure, small businesses can be profitable. Success in small home based business is not an accident. It requires both skills in a service or product area and acquisition of management and attitudinal competencies.
The purpose of this SBA Management Aid is to help you take stock of your interests, aptitudes and skills. Many people have good business ideas but not everyone has what it takes to succeed. If you are convinced that a profitable home business is attainable, this Management Aid will provide step by step guidance in development of the basic written business plan.
Information Gathering
A helpful tool for use in determining if you are ready to take the risks of a home based business operation is the SBA Publication #MA 2.016, Checklist for Going Into Business. It will help you focus on the basic steps in information gathering and business planning.
While the reasons for the rapid growth of home based business operations may vary from the need to supplement family income with a few hundred dollars all the way to a sophisticated technical consulting service billing hundreds of thousands of dollars, there are many common characteristics and challenges to be considered in launching most home based businesses, regardless of size. Some tasks are universal to all small business startups, while others are unique to a home base.
The experience of the author and interviews with dozens of home based operators over the past decade indicate that special planning is required to research legal and tax issues, proper space utilization and to establish time management discipline. Inadequate or careless attention to development of a detailed business plan can be costly for you and your family in terms of lost time, wasted talent and disappearing dollars.
The Entrepreneurial Personality
A variety of experts have documented research that indicates that successful small business entrepreneurs, whether male or female, have some common characteristics. How do you measure up? On this checklist, write a "Y" if you believe the statement describes you; an "N" if it doesn't; and a "U" if you can't decide:
ÄÄ I have a strong desire to be my own boss. ÄÄ Win, lose or draw, I want to be master of my own financial destiny. ÄÄ I have significant specialized business ability based on both my education and my experience. ÄÄ I have an ability to conceptualize the whole of a business; not just its individual parts, but how they relate to each other ÄÄ I develop an inherent sense of what is "right" for a business and have the courage to pursue it. ÄÄ One or both of my parents were entrepreneurs; calculated risk-taking runs in the family. ÄÄ My life is characterized by a willingness and capacity to persevere. ÄÄ I possess a high level of energy, sustainable over long hours to make the business successful.
While not every successful home based business owner starts with a "Y" answer to all of these questions, three or four "N"'s and "U"'s should be sufficient reason for you to stop and give second thought to going it alone. Many proprietors who sense entrepreneurial deficiencies seek extra training and support their limitations with help from a skilled team of business advisors such as accountants, bankers and attorneys.
Selecting A Business
Perhaps you have already decided what your home based business will be. You know how you will serve your market and with what. If not, but you are determined to establish a home based source of income, then you need to decide exactly what business you will enter. A logical first step for the undecided is to list potential areas of personal background, special training, educational and job experience, and special interests that could be developed into a business. Review the following list of activities which have proven marketable for others. On a scale of "0" (no interest or strength) to 10 (maximum interest or strength) indicate the potential for you and a total score for each activity;
My Level Personal Market Total of Interest Strength Strength Points
Personal services -- house cleaning ____________ ____________ ____________ ____________ -- baby-sitting ____________ ____________ ____________ ____________ -- tutoring ____________ ____________ ____________ ____________ -- secretarial ____________ ____________ ____________ ____________ -- catering ____________ ____________ ____________ ____________ -- direct mail ____________ ____________ ____________ ____________
Handicrafts -- needle work ____________ ____________ ____________ ____________ -- ceramics ____________ ____________ ____________ ____________ -- jewelry design ____________ ____________ ____________ ____________ -- upholstering ____________ ____________ ____________ ____________
Artistic work -- painting ____________ ____________ ____________ ____________ -- photography ____________ ____________ ____________ ____________ -- prints ____________ ____________ ____________ ____________ -- wire sculpture ____________ ____________ ____________ ____________ -- engraving ____________ ____________ ____________ ____________
Repair services -- small appliances ____________ ____________ ____________ ____________ -- furniture ____________ ____________ ____________ ____________ -- clothing ____________ ____________ ____________ ____________ -- TV and radio ____________ ____________ ____________ ____________ -- automotive ____________ ____________ ____________ ____________
Instruction skills -- languages ____________ ____________ ____________ ____________ -- math ____________ ____________ ____________ ____________ -- gourmet cooking ____________ ____________ ____________ ____________ -- music ____________ ____________ ____________ ____________ -- home repairs ____________ ____________ ____________ ____________
Mail order ideas -- product sales ____________ ____________ ____________ ____________ -- repairs ____________ ____________ ____________ ____________ -- business service ____________ ____________ ____________ ____________
Seasonal products -- foodstuffs ____________ ____________ ____________ ____________ -- clothing ____________ ____________ ____________ ____________ -- gift items ____________ ____________ ____________ ____________
Party sales -- cookware ____________ ____________ ____________ ____________ -- plants ____________ ____________ ____________ ____________ -- plastic goods ____________ ____________ ____________ ____________ -- cosmetics ____________ ____________ ____________ ____________
Your own ideas ___________________ ____________ ____________ ____________ ____________ ___________________ ____________ ____________ ____________ ____________ ___________________ ____________ ____________ ____________ ____________
For other ideas, check your local public library for one or more of the publications listed in the Resource Section of this Management Aid.
SCORING
0 to 10 Almost a sure loser 11 to 15 Reconsider, but proceed with caution 16 to 20 Some potential here, worth further study 21 to 25 Probably a winner, if you answered correctly 26 to 30 How can you lose?
This checklist should give you a good idea of the kind of a business that would suit you best and why.
Time Management
For both the novice and the experienced business person planning a small home based enterprise, an early concern requiring self-evaluation is Time Management.
It is very difficult for some people to make and keep work schedules even in the disciplined setting of an employer's office. At home, as your own boss, the problem can be much greater. To determine how much time you can devote to your business, begin by drafting a weekly task timetable listing all current and potential responsibilities and the blocks of time required for each. When and how can business responsibilities be added without undue physical or mental stress on you and your family? Potential conflicts must be faced and resolved at the outset and as they occur. Otherwise, your business can become a nightmare. During the first year of operation, continue to chart, post and checkoff tasks on a daily, weekly, monthly basis.
Distractions and excuses for procrastination abound. It is important to keep both a planning and an operating log. These tools will help avoid oversights and provide vital information when memory fails. To improve the quality of home work time, consider installation of a separate telephone line for the business and attach an answering machine to take messages when you do not wish to be distracted or are away from home. A business line has the added advantage of allowing you to have a business listing in the phone book and, if you wish to buy it, an ad in the classified directory.
Is A Home Based Business Site Workable?
* Where in the home will the business be located? * What adjustments to living arrangements will be required? * What will be the cost of changes? * How will your family react? * What will the neighbors think?
It will be important to set aside a specific work area. For example, more than one fledgling business ledger has gone up in smoke, been chewed by the family dog, or thrown out with the trash when business records were not kept separate from family papers. Ready access to business records during work hours is essential, but they must be protected.
Check the reasons below for and against working at home that apply to you. List any additional drawbacks or obstacles to operating this business at home.
Pros Cons
Lower startup costs Isolation Lower fixed costs Space limitations Tax benefits Zoning Lifestyle flexibility Security concerns No commuting Household interference
Note that changes in personal habits will be required. Examples:
* Self discipline to keep TV off while working. * Limiting personal telephone calls in length and number * Diligence in meeting work deadlines when no one is checking
Ask family members to comment on pros and cons. Their concerns may require reconsideration of some specifics.
Is A Home Based Business Site Allowable?
Now you will want to investigate potential legal and community problems associated with operating the business from home. You should gather, read and digest specialized information concerning federal, state, county and municipal laws and regulations concerning home based business operations.
Check first! Get the facts in writing. Keep a topical file for future reference. Some facts and forms will be needed for your business plan. There may be limitations enforced that can make your planned business impossible or require expensive modifications to your property.
Items to be investigated, recorded and studied are:
TO DO DONE
____ ____ county or city zoning code restrictions ____ ____ necessary permits and licenses for operation ____ ____ state and local laws and codes regarding zoning ____ ____ deed or lease restrictions such as covenants and restrictive conditions of purchase ____ ____ parking and customer access; deliveries ____ ____ sanitation, traffic and noise codes ____ ____ signs and advertising ____ ____ state and federal code requirements for space, ventilation, heat and light ____ ____ limitations on the number and types of workers ____ ____ reservations that neighbors may have about a business next to or near them
Here are some ways to collect your information. Call or visit the zoning office at county headquarters or city hall. In some localities the city or county Office of Economic Development has print materials available to pinpoint key "code", items affecting home based business. If not, check with the local Chamber of Commerce office.
Even in rural areas, the era of unlimited free enterprise is over. Although the decision makers may be in the state capital or in a distant regional office of a federal agency, check before investing in inventory, equipment or marketing programs. If in doubt call the state office of Industrial Development or the nearest SBA district office. In some states the county agent or home demonstration agent will have helpful information concerning rural or farm business development.
To cover the income tax rules regarding a home based business, be sure to secure the IRS Publication #587, BUSINESS USE OF YOUR HOME.
Is The Home Based Business Site Insurable?
In addition to community investigations, contact your insurance company or agent. It is almost certain that significant changes will be required in your coverage and limits when you start a home based business. When you have written a good description of your business, call your agent for help in insuring you properly against new hazards resulting from your business operations such as:
* fire, theft and casualty damage to inventories and equipment * business interruption coverage * fidelity bonds for employees * liability for customers, vendors and others visiting the business * workmen's compensation * group health and life insurance * product liability coverage if you make and/or sell a product; workmanship liability for services * business use of vehicle coverage
Overall Home Site Evaluation
After you have gathered as much information as seems practical you may wish to evaluate a home based site vs. one or more other nearby locations. Here's a handy checklist. Using the "0" to "10" scale, grade these vital factors:
Factors To Consider Grades For Each Factor
Home Other
1. Customer convenience _____ _____ 2. Availability of merchandise or _____ _____ raw materials 3. Nearby competition _____ _____ 4. Transportation availability and rates _____ _____ 5. Quality and quantity of employees _____ _____ available 6. Availability of parking facilities _____ _____ 7. Adequacy of utilities (sewer, water _____ _____ power, gas) 8. Traffic flow _____ _____ 9. Tax burden _____ _____ 10. Quality of police and fire services _____ _____ 11. Environmental factors _____ _____ 12. Physical suitability of building _____ _____ 13. Provision for future expansion _____ _____ 14. Vendor delivery access _____ _____ 15. Personal convenience _____ _____ 16. Cost of operation _____ _____ 17. Other factors including how big _____ _____ you can get without moving
Totals _____ _____
The greater the difference between the totals of the two columns, the clearer your decision should be. In the space below, write out what your decision and the reasons that support it.
Decision:
Writing The Business Plan
Now that your research and plan development is nearing completion, it is time to move into action. If you are still in favor of going ahead, it is time to take several specific steps. The key one is to organize your dream scheme into a business plan.
What is it?
A business plan: * Is the management and financial "blueprint" for startup and profitable operation * Is written by the home based business owner with outside help as needed * Is accurate and concise as a result of careful study * Explains how the business will function in the marketplace * Clearly depicts its operational characteristics * Details how it will be financed * Outlines how it will be managed * Serves as a prospectus for potential investors and lenders
Why create it?
* The process of putting the business plan together, including the thought that you put in before writing it, forces you to take an objective, critical, unemotional look at your entire business proposal
* The finished written plan is an operational tool which, when properly used, will help you manage your business and work toward its success
* The completed business plan is a means for communicating your ideas to others and provides the basis for your financing your business
Who should write it?
* The home based owner to the extent possible * Seek assistance in weak areas, such as: --accounting --insurance --capital requirements --operational forecasting --tax and legal requirements
When should a Business Plan be used?
* To make crucial startup decisions * To reassure lenders or backers * To measure operational progress * To test planning assumptions * As a basis for adjusting forecasts * To anticipate ongoing capital and cash requirements * As the benchmark for good operational management
Proposed Outline For Home Based Business Plan
This outline is suggested for a small proprietorship or family business. Shape it to fit your unique needs. For more complex manufacturing or franchise operations see the Resource Section for other options.
Part I. -- Business Organization
Cover Page: A. Business Name: Street Address: Mailing Address: Telephone number: Owner(s) Name(s): Inside Pages: B. Business Form: (proprietorship, partnership, corporation) If incorporated: (state of incorporation)
Include copies of key subsidiary documents in an appendix. Remember even partnerships require written agreements of terms and conditions to avoid later conflicts, and to establish legal entities and equities. Corporations require charters, articles of incorporation and by-laws.
Part II. -- Business Purpose and Function
In this section write an accurate, yet concise description of the business. Describe the business you plan to start in narrative form.
What is the principal activity? Be specific. Give product and/or service description(s): * retail sales? * manufacturing? * service? * other? How will it be started? * a new startup * the expansion of an existing business * a franchise operation * actual or projected start up date Why will it succeed? Promote your idea! * how and why this business will be successful. * what is unique about your business * what is its market "niche"
What is your experience in this business? If you have a current resume of your career include it in an appendix and reference it here. Otherwise write a narrative here and include a resume in the finished product. If you lack specific experience, detail how you plan to gain it, such as training, apprenticeship or working with partners who have experience.
The Marketing Plan
The marketing plan is the core of your business rationale. To develop a consistent sales growth a home based business person must become knowledgeable about the market. To demonstrate your understanding, this section of the home based business plan should seek to concisely answer several basic questions:
Who is your market?
* Describe the profile of your typical customer Age: Male, female, both: How many in family: Annual family income: Location: Buying patterns: Reason to buy from you: Other:
* Geographically describe your trading area: (i.e. county, state, national, etc.)
* Economically describe your trading area: (single family, average earnings, number of children, etc.)
How large is the market?
* Total units or dollars: * Growing______Steady______Decreasing______ * If growing, annual growth rate:
Who is your competition? No small business operates in a vacuum. Get to know and respect the competition. Target your marketing plans. Identify direct competitors (both in terms of geography and product lines), and those who are similar or marginally comparative. Begin by listing names, addresses and products or services. Detail briefly but concisely the following information concerning each of your competitors:
* Who are the nearest ones? * How are their businesses similar or competitive to yours? * Do you have a unique "niche"? Describe it. * How will your service or product be better or more saleable than your competitors? * Are their businesses growing? Stable? Declining? Why? * What can be learned from observing their operations and/or talking to their present or former clients? * Will you have competitive advantages or disadvantages by operating from home? Be honest!
Remember, your business can become more profitable by adopting the good competitive practices and by avoiding their errors.
To help you evaluate how successful your product or service will be, go down the following list of standard characteristics (you may want to add more from your knowledge of your field) and make a candid evaluation of your competitive "edge:' On a scale of "0" (theirs puts mine to shame) to 10 (mine puts their to shame) indicate the potential for you and a total score:
FEATURE Price _______ Performance _______ Durability _______ Versatility _______ Speed/accuracy _______ Ease of operation or use _______ Ease of maintenance or repair _______ Ease or cost of installation _______ Size or weight or color _______ Appearance or styling or packaging _______
Total Points _______
A Total Points score of less than 60 indicates that you might reconsider the viability of your product or service and/or think about how you can improve it. Over 80 points indicates a clear competitive edge.
What percent of the market will you penetrate?
1. estimate the market in total units or dollars 2. estimate your planned volume 3. amount your volume will add to total market 4. subtract 3 from 2
Line 4 represents the amount of your planned volume that must be taken away from the competition.
What pricing and sales terms are you planning? The primary consideration in pricing a product or service is the value that it represents to the customer. If, on the previous checklist of features, your product is truly ahead of the field, you can command a premium price. On the other hand, if it is a "me too" product, you may have to "buy" a share of the market to get your foothold and then try to move price up later. This is always risky and difficult. One rule will always hold: ultimately, the market will set the price. If your selling price does not exceed your costs and expenses by the margin necessary to keep your business healthy, you will fail. Know your competitors pricing policies. Send a friend to comparison shop. Is there discounting? Special sales? Price leaders? Make some "blind" phone calls. Detail your pricing policy.
What is your sales plan? Describe how you will sell, distribute and/or service what you sell. Be specific. Below are outlined some common practices:
Direct sales by telephone or in person. The tremendous growth of individual sales representatives who sell by party bookings, door to door, and through distribution of call back promotional campaigns suggests that careful research is required to be profitable.
Mail Order
Specialized markets for leisure time or unique products have grown as more two income families find less time to shop. Be aware of recent mail order legislation and regulation.
Franchising
a. You may decide to either buy into someone else's franchise as a franchisee or
b. Create your own franchise operation that sells rights to specific territories or product lines to others. Each will require further legal, financial, and marketing research.
An excellent starting point if you are considering franchise involvement is the SBA Publication #MA 7.007, Evaluating Franchising Opportunities. The International Franchise Association also publishes a number of valuable aids in this field.
Distributors
You may decide to work as a local or regional distributor for several different product lines.
Outline your sales plan.
What is your advertising plan? Each product or service will need its own advertising strategy as part of the total business marketing plan. Before developing an advertising campaign for your business plan, take time to review a few basic assumptions. By definition, advertising is any form of paid, non-personal promotion that communicates with a large number of potential customers at the same time. The purpose of advertising is to inform, persuade and remind customers about your company's products or services. Every advertising activity should have specific goals. Common examples are:
* To bring in sales orders or contracts * To promote special events such as sales, business openings, new products * To bring in requests for estimates or for a sales representative to call * A special goal at the outset may be to use special media to establish yourself even before startup and to get potential customer "feedback."
These might include one or more of the following;
* Purchase and distribution of business cards to potential clients * Posting notices on free bulletin boards in area supermarkets or office complexes * A telephone survey of potential clients to alert them to your startup plans.
To assist in determining what types of advertising are appropriate and within company budget projections, it will be necessary to carefully review your customer profile. From this review, establish a clear statement of advertising goals. Write down what you want your advertising to accomplish.
The next step will be to develop answers to the following crucial questions:
What should be said about the business and how should it be stated? What media should be used? How much can be afforded? How can the advertising program be implemented? How can its effectiveness be measured?
The basic criteria for selecting specific types of media will include concise answers to the following:
* Trading Area -- Do you plan to serve or sell to an industrial market, a national market, a neighborhood or specialized market? Describe yours.
* Customer Type -- What does your potential customer read or listen to? Where? How often? What image does the media you are considering suggest? Does it fit your customer? Describe your customer.
* Budget Restrictions -- How will the amount of money you have to spend limit the media you can use? How can you spread your budget out over a year to give a repetitive, continuous message? While you may have to spend more at the start, a good ongoing guideline is that advertising should not exceed one or two percent of sales. Set forth how much you are willing to invest in advertising in the first year: $_______
Break it down into months or quarters:
$______ $______ $______ $______ $______ $______ $______ $______ $______ $______ $______ $______
* Continuity of Message -- How will the type of product or service, customer profile and seasonal buying patterns affect your choice of media and the frequency with which you advertise? Explain your message.
* Past Performance -- What is the track record for use of the medium you are considering for your type of business? What do your competitors use? What does your trade association suggest? Note appropriate comments.
For more on media selection and creating your advertising plan, see SBA publication #MA4.018, PLAN YOUR ADVERTISING BUDGET.
Management Plan
Who will do what? Be sure to include four basic sets of information:
1. State a personal history of principals and related work, hobby or volunteer experience (include formal resumes in Appendix) 2. List and describe specific duties and responsibilities of each 3. List benefits and other forms of compensation for each 4. Identify other professional resources available to the business: Example: Accountant, lawyer, insurance broker, banker, etc. Describe the relationship of each to business: Example: "accountant available on part time hourly basis, as needed, initial agreement calls for services not to exceed x hours per month at $ xx.xx per hour."
To make this section graphically clear, start with a simple organizational chart that lists specific tasks and shows who (type of person is more important than individual name other than for principals) will do what indicated by arrows, work flow and lines of responsibility and/or communications. Consider the following examples:
Company President (owner-manager) ³ ÚÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ¿ ³ ³ ³ Shop Manager Sales Manager Office (owner-manager) (owner-manager)
Company President (owner-manager) ³ ÚÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄ¿ ³ ³ ³ Sales Manager Shop Manager Office (owner-manager) (owner-manager)
As the service business grows, its organization chart could look like this:
Company President (owner-manager) ³ ÚÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÄÄÄÄÄÄ¿ ³ ³ ³ Shop Manager Sales Manager Office ³ (owner-manager) ÚÄÄÄÁÄÄÄ¿ ³ ³ Foreman Parts Manager
Concisely answer the following questions:
What are your personnel needs now? What skills must each key person have? Are the people needed available? Name them and indicate full or part time and salary rates:
Detail a proposed work schedule by week and month for at least the first year.
Calculate total salaries, wages, fringe benefits and payroll taxes for each month of the first year:
Compen- Fringe Payroll sation Benefits Taxes
1st Mo $______ $______ $______ 2nd Mo. $______ $______ $______ 3rd Mo. $______ $______ $______ 4th Mo. $______ $______ $______ 5th Mo. $______ $______ $______ 6th Mo. $______ $______ $______ 7th Mo. $______ $______ $______ 8th Mo. $______ $______ $______ 9th Mo. $______ $______ $______ 10th Mo. $______ $______ $______ 11th Mo. $______ $______ $______ 12th Mo. $______ $______ $______ Full Yr. $______ $______ $______
If you have identified any gaps in personnel skills, state how these will be overcome by training, purchase of outside services, or subcontracting. Check with the nearest state employment service office for assistance. Write your plan.
What is your banking plan?
What will be the location and type of bank accounts opened for the business. A word of caution, keep business accounts separate from personal or family accounts. These vital records will be necessary for future tax and accounting purposes. Describe your banking plan.
How is Your Credit Rating?
There may be several partial answers to this question. All will be of importance to the future of the business. First, what is your personal history of paying debts? Just to be safe, purchase a copy of your personal credit record from the local credit bureau for a small fee and make sure that it is accurate. Look in the classified telephone directory under "Credit Reporting Agencies."
To establish a credit rating, it is necessary to secure credit with a number of businesses and to use it. Your rating will be based upon your record for paying for goods and services based upon the agreed terms. If your prior credit rating is poor, discuss with your lawyer accountant and banker options for improvement before seeking and being refused business credit.
Operational Plans Summary
The purpose of this section is to summarize from previous sections the various operations of your business and link them to the finance section of your business plan. In addition, you will want to summarize the advantages and disadvantages of a home based business operation. Refer to your earlier checklist, and write your summary.
The Financial Plan
Clearly the most critical section of your Business Plan Document is the Financial Plan. In formulating this part of the planning document, you will establish vital schedules that will guide the financial health of your business through the troubled waters of the first year and beyond.
Before going into the details of building the Financial Plan, it is important to realize that some basic knowledge of accounting is essential to the productive management of your business. If you are like most home business owners, you probably have a deep and abiding interest in the product or services that you sell or intend to sell. You like to do what you do, and even more fulfilling is that you are making money doing it. There is nothing wrong with that. Your conviction that what you are doing or making is worthwhile is vitally important to success. Nonetheless, the income of a coach who takes the greatest pride in producing a winning team will largely depend on someone keeping score of the wins and losses.
The business owner is no different. Your product or service may improve the condition of mankind for generations to come, but, unless you have access to an unlimited bankroll, you will fail if you don't make a profit. If you don't know what's going on in your business, you are not in a very good position to assure its profitability.
Most home based businesses will use the "cash" method of accounting with a system of recordkeeping that may be little more than a carefully annotated checkbook in which is recorded all receipts and all expenditures, backed up by a few forms of original entry (invoices, receipts, cash tickets, etc.) For a Sole Proprietorship, the business form assumed by this Management Aid, the very minimum of recorded information is that required to accurately complete the federal Internal Revenue Service Form 1040, Schedule C. Other business types (partnerships, joint ventures, corporations) have similar requirements but use different tax forms.
If your business is, or will be, larger than just a small supplement to family income, you will need a something more sophisticated. Stationery stores can provide you with several packaged small business accounting systems complete with simple journals and ledgers and detailed instructions in understandable language.
Should you feel that your accounting knowledge is so rudimentary that you will need professional assistance to establish your accounting system, the classified section of your telephone directory can lead you to a number of small business services that offer a complete range of accounting services. You can buy as much as you need, from a simple "peg-board" system all the way to computerized accounting, tax return service, and monthly profitability consultation. Rates are reasonable for the services rendered and an investigative consultation will usually be free. Look under the heading, "Business Consultants", and make some calls. Be sure to let them know the size of your business so you get to the ones who specialize in home based operations. Many of them are home-based entrepreneurs themselves and know what you will be going through. Let's start by looking at the makeup of the Financial Plan for the business.
The Financial Plan includes the following:
1. Financial Planning Assumptions -- these are short statements of the conditions under which you plan to operate.
* Market health: * Date of startup: * Sales buildup ($): * Gross profit margin: * Equipment, furniture and fixtures required: * Payroll and other key expenses that will affect the financial plan:
2. Operational Plan -- Profit and Loss Projection -- this is prepared for the first year, broken into twelve individual months. It should become your first year's budget. See Exhibits A & A-1.
3. Source of Funds Schedule -- this shows the source(s) of your funds to capitalize the business and how they will be distributed among your fixed assets and working capital.
4. Pro Forma Balance Sheet -- "Pro forma" refers to the fact that the balance sheet is before the fact, not actual. This form displays assets, liabilities and equity of the business. This will indicate how much investment will be required by the business and how much of it will be used as working capital in its operation.
5. Cash Flow Projection -- this will forecast the flow of cash into and out of your business through the year It helps you plan for staged purchasing, high volume months and slow periods.
Creating the Profit and Loss Projection
Refer to Exhibits A & A-1. Create a wide sheet of analysis paper with a three inch wide column at the extreme left and thirteen narrow columns across the page. Write at the top of the first page the planned name of your business. On the second line of the heading, write "Profit and Loss Projection". On the third line, write "First Year".
Then, note the headings on Exhibit A and copy them onto your 13-column sheet. If startup is indefinite, just write "Month #1", "Month #2", etc. Column 13 should be headed "Total Year".
In the wide, unnumbered column on the left of your 13 column sheet, copy the headings from the similar area on Exhibit A. Then follow the example set by Exhibit A and list all of the other components of your income, cost and expense structure. You may add or delete specific lines of expense to suit your business plan. Guard against consolidating too many types of expense under one account lest you lose control of the components. At the same time, don't try to break down expenses so discretely that accounting becomes a nuisance instead of a management tool. Once again, Exhibit A provides ample detail for most home based businesses.
Now, in the small column just to the left of the first monthly column, you will want to note which of the items in the left-hand column are to be estimated on a monthly (M) or a yearly (Y) basis. Items such as Sales, Cost of Sales and Variable Expenses will be estimated monthly based on planned volume and seasonal or other estimated fluctuations. Fixed Expenses can usually be estimated on an yearly basis and divided by twelve to arrive at even monthly values. The "M" and "Y" designations will be used later to distinguish between variable and fixed expense.
Depreciation allowances for Fixed Assets such as production equipment, office furniture and machines, vehicles, etc. will be calculated from the Source of Funds Schedule,
Exhibit A-1 describes line by line how the values on the Profit and Loss Projection are developed. Use this as your guide.
Source of Funds Schedule
To create this schedule, you will need to create a list of all of the Assets that you intend to use in your business, how much investment each will require and the source of funds to capitalize them. A sample of such a list is shown below:
ASSET COST SOURCE OF FUNDS Cash $ 2,500 Personal savings Accounts Receivable 3,000 From profits Inventory 2,000 Vendor credit Pickup truck 5,000 Currently owned Packaging machine 10,000 Installment purchase Office desk and chair 300 Currently owned Calculator 75 Personal cash Electric Typewriter 500 Personal savings
Before you leave your Source of Funds Schedule, indicate the number of months (years x 12) of useful life for depreciable fixed assets. (In the example, the pickup truck, the packaging machine and the furniture and office equipment would be depreciable.) Generally, any individual item of equipment, furniture, fixtures, vehicles, etc., costing over $100 should be depreciated. For more information on allowances for depreciation, you can get free publications and assistance from your local Internal Revenue Service office. Divide the cost of each fixed asset item by the number of months over which it will be depreciated. You will need this data to enter as monthly depreciation on your Profit and Loss Projection. All of the data on the Source of Funds Schedule will be needed to create the Balance Sheet.
Creating the Pro Forma Balance Sheet
Refer to Exhibit B. This is a Balance Sheet form. There are a number of variations of this form and you may find it prudent to ask your banker for the form that the bank uses for small business. It will make it easier for them to evaluate the health of your business. Use Exhibit B to get started and transfer the data to your preferred form later. Accompanying Exhibit B is Exhibit B-1 which describes line by line how to develop the Balance Sheet.
Even though you may plan to stage the purchase of some assets through the year, for the purposes of this pro forma Balance Sheet, assume that all assets will be provided at the startup.
Cash Flow Projection
An important subsidiary schedule to your financial plan is a monthly Cash Flow Projection. Prudent business management practice is to keep no more cash in the business than is needed to operate it and to protect it from catastrophe. In most small businesses, the problem is rarely one of having too much cash. A Cash Flow Projection is made to advise management of the amount of cash that is going to be absorbed by the operation of the business and compares it against the amount that will be available.
SBA has created an excellent form for this purpose and it is shown as Exhibit C. Your projection should be prepared on 13-column analysis paper to allow for a twelve month projection. Exhibit C-1 represents a line by line description and explanation of the components of the Cash Flow Projection which provides a step-by-step method of preparation.
Outside Sources of Assistance
The U.S. Small Business Administration's Office of Business Development programs are extensive and diversified. They include free individual counseling, courses, conferences, workshops, problem clinics, and a wide range of publications. Counseling is provided through community based organizations such as:
SCORE and ACE which help small business owners solve their operating problems through a one-on-one relationship. Counseling is not limited to small businesses that have a problem. It is available as well to managers of successful firms who wish to review their objectives and long-range plans for expansion and diversification.
SMALL BUSINESS INSTITUTES (SBIs) which have been organized through SBA on over 500 university and college campuses as another way to help small business. At each SBI, senior and graduate students at schools of business administration, and their faculty advisors, provide on-site management counseling. Students are guided by the faculty advisors and SBA management assistance experts and receive academic credit for their work.
SMALL BUSINESS DEVELOPMENT CENTERS (SBDCs) which draw from resources of local, state and federal government programs, the private sector, and university facilities to provide managerial and technical help, research studies, and other types of specialized assistance of value to small business. These university based centers provide individual counseling and practical training for small business owners.
BUSINESS MANAGEMENT TRAINING programs are co-sponsored by SBA in cooperation with educational institutions, Chambers of Commerce, and trade associations. Courses generally take place in the evening and last from six to eight weeks. In addition, conferences covering such subjects as working capital, business forecasting, and marketing are held for established businesses on a regular basis. SBA conducts, Pre-Business Workshops, dealing with finance, marketing assistance, types of business organizations, and business site selection, for prospective business owners. Clinics that focus on particular problems of small firms in specific industrial categories are held on an as-needed basis.
A Final Word
In completing this Management Aid, you have put in a great deal of time and effort. You should now have all of the elements needed to present as simple or sophisticated a prospectus for your enterprise as you desire. More important, you have created the management tools to guide you in your venture. Once the business opens its doors, you will be inundated by the details, problems, challenges and joys of going it alone. It will be difficult to hold to your course through the rough seas ahead, but don't forget this "chartbook", it will see you through to "Port Profit." It should be a living document, referred to regularly, massaged constantly, and revised to reflect your experience. Begin a planning cycle that expands this first year plan into one that spans three or five years out. Update it at regular intervals. Set your goals and live by them. Your success is in your hands. Good planning and good execution!
APPENDIX A
ÚÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ¿ ³ OPERATING PLAN FORECAST (Profit and Loss Projection) ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÂÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÂÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ´ ³ ³ Months 1 - 12 ³ Totals ³ ÆÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÑÍÍÍØÍÍÍÍÍÍÍÍÑÍÍÍÍÍÍÍÍÑÍÍÍØÍÍÍÍÍÍÍÍÑÍÍÍÑÍÍÍÍÍÍÍÍÑÍÍ͵ ³ ³Ind³ ³ ³ ³ ³ ³ ³ ³ ³Revenue (sales) ³ % ³Estimate³ Actual ³ % ³Estimate³ % ³Actual ³ % ³ ÆÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍ͵ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Total Revenue (sales)³ ³ ³ ³ ³ ³ ³ ³ ³ ÆÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍ͵ ³Cost of Sales ³ ³ ³ ³ ³ ³ ³ ³ ³ ÆÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍ͵ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Total Cost of Sales ³ ³ ³ ³ ³ ³ ³ ³ ³ ÆÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍ͵ ³Gross Profit ³ ³ ³ ³ ³ ³ ³ ³ ³ ÆÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍ͵ ³Expenses ³ ³ ³ ³ ³ ³ ³ ³ ³ ÆÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍ͵ ³Salary expense: sales³ ³ ³ ³ ³ ³ ³ ³ ³ ³people, office, other³ ³ ³ ³ ³ ³ ³ ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Payroll expenses ³ ³ ³ ³ ³ ³ ³ ³ ³ ³(taxes etc.) ³ ³ ³ ³ ³ ³ ³ ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Outside services ³ ³ ³ ³ ³ ³ ³ ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Supplies (office and ³ ³ ³ ³ ³ ³ ³ ³ ³ ³operating) ³ ³ ³ ³ ³ ³ ³ ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Repairs and Maint. ³ ³ ³ ³ ³ ³ ³ ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Advertising ³ ³ ³ ³ ³ ³ ³ ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Car, delivery and ³ ³ ³ ³ ³ ³ ³ ³ ³ ³travel ³ ³ ³ ³ ³ ³ ³ ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Accounting and legal ³ ³ ³ ³ ³ ³ ³ ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Rent ³ ³ ³ ³ ³ ³ ³ ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Telephone ³ ³ ³ ³ ³ ³ ³ ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Utilities ³ ³ ³ ³ ³ ³ ³ ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Insurance ³ ³ ³ ³ ³ ³ ³ ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Taxes (real estate ³ ³ ³ ³ ³ ³ ³ ³ ³ ³etc.) ³ ³ ³ ³ ³ ³ ³ ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Interest ³ ³ ³ ³ ³ ³ ³ ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Depreciation ³ ³ ³ ³ ³ ³ ³ ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Other Expenses ³ ³ ³ ³ ³ ³ ³ ³ ³ ³(specify each) ³ ³ ³ ³ ³ ³ ³ ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄ´ ³Miscellaneous ³ ³ ³ ³ ³ ³ ³ ³ ³ ³(unspecified) ³ ³ ³ ³ ³ ³ ³ ³ ³ ÆÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍ͵ ³ Total Expenses ³ ³ ³ ³ ³ ³ ³ ³ ³ ÆÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍØÍÍÍÍÍÍÍÍØÍÍ͵ ³ Net Profit ³ ³ ³ ³ ³ ³ ³ ³ ³ ÔÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÏÍÍÍÏÍÍÍÍÍÍÍÍÏÍÍÍÍÍÍÍÍÏÍÍÍÏÍÍÍÍÍÍÍÍÏÍÍÍÏÍÍÍÍÍÍÍÍÏÍÍ;
APPENDIX A1
PROFIT AND LOSS PROJECTION
The profit and loss statement (P&L) is valuable as a planning tool and as a key management tool to help control operations to reach business goals. It enables the owner/manager to develop a "preview" of the amount of profit, or loss, generated each month, and for the business year -- based on reasonable predictions of monthly levels of sales, costs, and expenses. The owner/manager can compare the year's expected profits or losses against the profit goals and needs established for the business. A completed P&L statement allows the owner/manager to compare actual figures with the monthly projections, and to take steps to correct any problems.
REVENUE (Sales)
* List the departments within the business, e.g., assume your business is appliance sales and service: New appliances, used ones, parts, in-shop service, on-site service.
* In the "Estimate" columns, enter a reasonable projection of monthly sales for each department of the business. Include cash and on-account sales. In the "Actual" columns, enter the actual sales for the month as they become available.
* Exclude from the Revenue section any revenue that is not strictly related to the business.
COST OF SALES
* Cite costs by department of the business, as above.
* In the "Estimate" columns enter the cost of sales estimated for each month for each department. For product inventory, calculate the cost of the goods sold for each department (beginning inventory plus purchases and transportation costs during the month, minus the inventory). Enter "Actual" costs when known each month.
Gross Profits -- Subtract the total cost of sales from the total revenue.
EXPENSES
* Salary Expenses: Base pay plus overtime. * Payroll Expenses: Include paid vacations, sick leave, health insurance, unemployment insurance, social security taxes. * Outside Services: Include costs of subcontracts, overflow work farmed out, special or one-time services. * Supplies: Services and items purchased for use in the business, not for resale. * Repairs and Maintenance: Regular maintenance and repair, including periodic large expenditures such as painting or decorating. * Advertising: Include desired sales volume, and yellow pages expenses, e.g. * Car, Delivery and Travel: Include charges if personal car used in business, including parking, tolls, buying trips, etc. * Accounting and Legal: Outside professional services. * Rent: List only real estate used in the business. * Telephone: Self-explanatory. * Utilities: Water, heat, light, etc. * Taxes (real estate, etc.): Inventory, sales, excise tax, others. * Interest: Self-explanatory. * Depreciation: Amortization of capital assets. * Other Expenses (specify each): e.g., tools, leased equipment. * Miscellaneous (unspecified): Small expenditures without separate accounts.
Net Profit -- To find net profit, subtract total expenses from gross profit.
APPENDIX B
Company Name 1 BALANCE SHEET As of (current date)
2 ASSETS LIABILITIES 7 Current Assets Current Liabilities Cash $____ Accounts payable $____ Accounts receivable $____ Short-term notes $____ less allowance for Current portion doubtful accounts $____ of long-term notes $____ Net realizable value $____ Interest payable $____ Inventory $____ Taxes payable $____ Temporary investments $____ Accrued payroll $____ Prepaid expenses $____ Total Current Liabilities $____ 8 3 Total Current Assets $____ Long-Term Liabilities Long-Term Investments Notes payable $____ (detailed list) $____ Total Long-Term Liabilities $____ 9 4 Total Investments $____ TOTAL LIABILITIES $____ 7 Fixed Assets EQUITY Land $____ Total Owner's Equity Buildings: $____ at (proprietorship) $____ cost, less accumulated or depreciation of $____ (Name's) Equity $____ Net book value $____ (Name's) Equity $____ Equipment: $____ at (partnership) cost, less accumulated Total Partners' Equity $____ 10 depreciation of $ or Net book value $____ Shareholders' Equity Furniture/Fixtures: $____ at (corporation) cost, less accumulated Capital stock $____ depreciation of $____ Capital paid-in in excess Net book value $____ of par $____ Autos/Trucks: $____ at Retained earnings $____ cost, less accumulated Total Shareholders' Equity $____ depreciation of $____ TOTAL LIABILITIES Net book value $____ AND EQUITY $____ 11 5 Total Net Fixed Assets $____ RECONCILEMENT OF EQUITY Other Assets As of (current date) (detailed list) $____ Equity at beginning of period $____ 6 Total Other Assets $____ Plus: Net income (or Minus: 2 TOTAL ASSETS $____ Net loss) after taxes $____ Plus: Additional capital contributions (investments by owner(s) or stock purchases by shareholders $____ Less: Total deductions (withdrawals by owner(s) or dividends to shareholders) $____ Equality as shown on current Balance sheet $____ 12
Source: "Understanding Financial Statements," Small Business Reporter, Copyright: Bank of America NT & SA, 1980.
APPENDIX B1
Sample Blank Balance Sheet
The following text covers the essential elements of a Balance Sheet. Figures used to compile the Balance Sheet are taken from the previous and current Balance Sheet as well as the current Income Statement (or Profit & Loss Statement). The report is usually attached to the Balance Sheet.
1. Heading -- The legal name of the business, the type of statement, and the day, month, and year. Must be shown at the top of the report.
2. Assets -- Anything of value that is owned or legally due the business. Total assets include all net realizable and net book (also net carrying) values. Net realizable and net book values are amounts derived by subtracting any estimated allowances for doubtful accounts, depreciation, and reductions of future service -- such as amortization of a premium during the term of an insurance policy -- from the acquisition price of assets.
3. Current Assets -- Cash and resources that can be converted into cash within 12 months of the date of the Balance Sheet (or during one established cycle of operations). Besides cash (money on hand and demand deposits in the bank, e.g., checking accounts and regular savings accounts), resources include:
Accounts Receivable -- The amounts due from customers in payment for merchandise or services. Inventory -- Includes raw materials on hand, work in process, and all finished goods either manufactured or purchased for resale. Temporary Investments -- Interest- or dividend-yielding holdings expected to be converted into cash within a year. Also called marketable securities or short-term investments, they include stocks and bonds, certificates of deposit, and time deposit savings accounts. List on the Balance Sheet at either their cost or market value, whichever is less. Prepaid Expenses -- Goods, benefits, or services a business buys or rents in advance of use. Examples are office supplies, insurance protection, and floor space.
4. Long-Term Investments -- Also called long-term assets. They are holdings the business intends to keep for at least a year and that typically yield interest or dividends. Included are stocks, bonds, and savings accounts earmarked for special purposes.
5. Fixed Assets -- Fixed assets, frequently called plant and equipment, are the resources a business owns or acquires for use in operations and does not intend for resale. Land is listed at its original purchase price, with no allowance for appreciation or depreciation. Other fixed assets are listed at cost, less depreciation. Fixed assets may be leased. Depending on the leasing arrangement, both the value and the liability of the leased property may need to be listed on the Balance Sheet.
6. Other Assets -- Resources not listed with any of the above assets. Examples include tangibles such as outdated equipment salable to the scrap yard, and intangibles such as trademarks.
7. Liabilities -- All monetary obligations of a business and all claims creditors have on its assets.
8. Current Liabilities -- All debts and obligations payable within 12 months or within one cycle of operations. Typically they are:
Accounts Payable -- Amounts owed to suppliers for goods and services purchased in connection with business operations. Short-Term Notes -- The balance of principal due to pay off short-term debt for borrowed funds. Current Portion of Long-Term Notes -- Current amount due of total balance on notes whose terms exceed 12 months. Interest Payable -- Any accrued fees due for use of both short- and long-term borrowed capital and credit extended to the business. Taxes Payable -- Amounts estimated by an accountant to have been incurred during the accounting period. Accrued Payroll -- Salaries and wages currently owned.
9. Long-Term Liabilities -- Notes, contract payments, or mortgage payments due over a period exceeding 12 months or one cycle of operations. They are listed by outstanding balance, less the current portion due.
10. Equity -- Also called net worth. Equity is the claim of the owner(s) on the assets of the business. In a proprietorship or partnership, equity is each owner's original investment plus any earnings after withdrawals.
In a corporation, the owners are the shareholders. The corporation's equity is the sum of contributions plus earnings retained after paying dividends.
11. Total Liabilities and Equity -- The sum of these two amounts must always match that for Total Assets.
12. Reconcilement of Equity -- Used for proprietorships and partnerships, this report reconciles the equity shown on the current Balance Sheet. It records equity at the beginning of the accounting period and details additions to or subtractions from this amount made during the period. Typically, additions and subtractions are net income or loss and owner contributions and/or deductions.
For corporations, the same type of report is called the Statement of Retained Earnings. It lists increases or decreases in this accumulated net income since the beginning of the current period.
Source: Extracted from "Understanding Financial Statements;' Small Business Reporter, Copyright: Bank of America NT & SA 1980.
APPENDIX C
MONTHLY CASH FLOW PROJECTION
ÚÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÂÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÒÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÒÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ¿ ³ ³ Pre-Start-up º 1 - 12 º Total ³ ³ ³ Position º º ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒ×ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ´ ³ YEAR MONTH ³ºººººººººººººººººº º Columns 1-12 ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐ×ÄÄÄÄÄÄÄÄÂÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÂÄÄÄÄÄÄÄÄ´ ³ ³Estimate³ Actual ºEstimate³ Actual ºEstimate³ Actual ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÁÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒ´ ³1. CASH ON HAND ³ º ³ ºººººººººººººººººº³ ³(Beginning ³ º ³ ºººººººººººººººººº³ ³of month) ³ º ³ ºººººººººººººººººº³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐд ³2. CASH RECEIPTS ³ºººººººººººººººººº ³ º ³ ³ ³(a) Cash Sales ³ºººººººººººººººººº ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ´ºººººººººººººººººÇÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(b) Collections ³ºººººººººººººººººº ³ º ³ ³ ³from credit accounts³ºººººººººººººººººº ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(c) Loan or other ³ ³ º ³ º ³ ³ ³Cash Injection ³ ³ º ³ º ³ ³ ³(Specify) ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³3. TOTAL CASH ³ ³ º ³ º ³ ³ ³RECEIPTS ³ ³ º ³ º ³ ³ ³(2a+2b+2c=3) ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒ´ ³4. TOTAL CASH ³ ³ º ³ ºººººººººººººººººº³ ³AVAILABLE (Before ³ ³ º ³ ºººººººººººººººººº³ ³cash out)(1+3) ³ ³ º ³ ºººººººººººººººººº³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐд ³5. CASH PAID OUT ³ ³ º ³ º ³ ³ ³(a) Purchases ³ ³ º ³ º ³ ³ ³(Merchandise) ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(b) Gross Wages ³ ³ º ³ º ³ ³ ³(Excludes ³ ³ º ³ º ³ ³ ³Withdrawals) ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(c) Payroll Expenses³ ³ º ³ º ³ ³ ³(Taxes, etc.) ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(d) Outside Services³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(e) Supplies ³ ³ º ³ º ³ ³ ³(Office and ³ ³ º ³ º ³ ³ ³Operating) ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(f) Repairs and ³ ³ º ³ º ³ ³ ³Maintenance ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(g) Advertising ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(h) Car, Delivery, ³ ³ º ³ º ³ ³ ³Travel ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(i) Accounting and ³ ³ º ³ º ³ ³ ³Legal ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(j) Rent ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(k) Telephone ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(l) Utilities ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(m) Insurance ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(n) Taxes (Real ³ ³ º ³ º ³ ³ ³Estate, etc.) ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(o) Interest ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(p) Other Expenses ³ ³ º ³ º ³ ³ ³(Specify each) ³ ³ º ³ º ³ ³ (q) Miscellaneous ³ ³ º ³ º ³ ³ ³(Unspecified) ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(r) Subtotal ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(s) Loan Principal ³ ³ º ³ º ³ ³ ³Payment ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(t) Capital ³ ³ º ³ º ³ ³ ³Purchases (Specify) ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(u) Other Start-up ³ºººººººººººººººººº ³ º ³ ³ ³Costs ³ºººººººººººººººººº ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(v) Reserve and/or ³ ³ º ³ º ³ ³ ³Escrow (Specify) ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³(w) Owner's ³ ³ º ³ º ³ ³ ³Withdrawal ³ ³ º ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³6. TOTAL CASH PAID ³ ³ º ³ º ³ ³ ³OUT (Total 5a-5w) ³ ³ º ³ º ³ ³ ÆÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍØÍÍÍÍÍÍÍÍØÍÍÍÍÍÍÍÍÎÍÍÍÍÍÍÍÍØÍÍÍÍÍÍÍÍÎËËËËËËËËËËËËËËËË˵ ³7. CASH POSITION ³ ³ º ³ ºººººººººººººººººº³ ³(End of Month) ³ ³ º ³ ºººººººººººººººººº³ ³(4 minus 6) ³ ³ º ³ ºººººººººººººººººº³ ÆÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍÍØËËËËËËËËËËËËËËËËËÎÍÍÍÍÍÍÍÍØÍÍÍÍÍÍÍÍÎÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊʵ ³ ESSENTIAL OPERATING³ºººººººººººººººººº ³ º ³ ³ ³ DATA ³ºººººººººººººººººº ³ º ³ ³ ³ (Non-cash flow ³ºººººººººººººººººº ³ º ³ ³ ³ information) ³ºººººººººººººººººº ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ´ºººººººººººººººººÇÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ´ ³ A. Sales Volume ³ºººººººººººººººººº ³ º ³ ³ ³ (Dollars) ³ºººººººººººººººººº ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒ´ ³ B. Accounts ³ º ³ ºººººººººººººººººº³ ³ Receivable ³ º ³ ºººººººººººººººººº³ ³ (End of Month) ³ º ³ ºººººººººººººººººº³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐд ³ C. Bad Debt ³ºººººººººººººººººº ³ º ³ ³ ³ (End of Month) ³ºººººººººººººººººº ³ º ³ ³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒ´ ³ D. Inventory on ³ ³ º ³ ºººººººººººººººººº³ ³ Hand ³ ³ º ³ ºººººººººººººººººº³ ³ (End of Month) ³ ³ º ³ ºººººººººººººººººº³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄĶººººººººººººººººº³ ³ E. Accounts Payable³ ³ º ³ ºººººººººººººººººº³ ³ (End of Month) ³ ³ º ³ ºººººººººººººººººº³ ÃÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÅÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒÒ×ÄÄÄÄÄÄÄÄÅÄÄÄÄÄÄÄÄ×ÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐд ³ F. Depreciation ³ºººººººººººººººººº ³ º ³ ³ ÀÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÁÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÐÄÄÄÄÄÄÄÄÁÄÄÄÄÄÄÄÄÐÄÄÄÄÄÄÄÄÁÄÄÄÄÄÄÄÄÙ APPENDIX C1
1. CASH ON HAND. . . . . . . . . . Cash on hand same as (7), Cash Position (Beginning of month) Previous Month 2. CASH RECEIPTS (a) Cash Sales. . . . . . . . . All cash sales. Omit credit sales unless cash is actually received (b) Collections from Credit . . Amount to be expected from all credit Accounts accounts (c) Loan or other cash. . . . . Indicate here all cash injections not injection shown in 2(a) or 2(b) above. See "A" of "Analysis" 3. TOTAL CASH RECEIPTS . . . . . . Self explanatory (2a+2b+2c=3) 4. TOTAL CASH AVAILABLE. . . . . . Self explanatory (Before cash out)(1+3) 5. CASH PAID OUT (a) Purchases (Merchandise) . . Merchandise for resale or for use in product (paid for in current month) (b) Gross wages (excludes . . . Base pay plus overtime (if any) withdrawals) (c) Payroll expenses. . . . . . Include paid vacations, paid sick leave, (Taxes, etc.) health insurance, unemployment insurance etc. (this might be 10 to 45% of 5(b)) (d) Outside services. . . . . . This could include outside labor and/or material for specialized or overflow work, including subcontracting (e) Supplies (Office and. . . . Items purchased for use in the business operating) (not for resale) (f) Repairs and Maintenance . . Include periodic large expenditures such as painting or decorating (g) Advertising . . . . . . . . This amount should be adequate to maintain sales volume--include telephone book yellow page cost (h) Car, Delivery, and Travel . If personal car is used, charge in this column--including parking (i) Accounting and legal. . . . Outside services, including for example, bookkeeping (j) Rent. . . . . . . . . . . . Real estate only (See 5(p) for other rentals) (k) Telephone . . . . . . . . . Self explanatory (l) Utilities . . . . . . . . . Water, heat, light and/or power (m) Insurance . . . . . . . . . Coverages on business property and products e.g. fire, liability; also workman's compensation, fidelity, etc. Exclude "executive" life (include in "5W"). (n) Taxes (Real estate, etc.) . Plus inventory tax-sales tax-excise tax if applicable (o) Interest. . . . . . . . . . Remember to add interest on loan as it is injected (See 5(p) for other rentals) (p) Other Expenses (Specify . . Unexpected expenditures may be included each) here as a safety factor Equipment expensed during the month should be included here (Non-capital equipment) When equipment is rented or leased record payments here (q) Miscellaneous . . . . . . . Small expenditures for which separate (Unspecified) accounts would not be practical (r) Subtotal. . . . . . . . . . This subtotal indicates cash out for operating costs (s) Loan Principal Payment. . . Include payment on all loans, including vehicle and equipment purchases on time payment (t) Capital Purchases . . . . . Non-expensed (depreciable) expenditures (Specify) such as equipment, building, vehicle purchases, and leasehold improvements (u) Other Start-up Costs. . . . Expense incurred prior to first month projection and paid for after the "start-up" position (v) Reserve and/or Escrow . . . Example: insurance, tax, or equipment (Specify) escrow to reduce impact of late periodic payments (w) Owner's Withdrawal. . . . . Should include payment for such things as owner's income tax, social security, health insurance, "executive" life insurance premiums, etc. 6. TOTAL CASH PAID OUT . . . . . . Self-explanatory (Total 5a thru 5w) 7. CASH POSITION . . . . . . . . . Enter this amount in (1) Cash on Hand (End of month)(4-6) following month--See "A" of "Analysis"
ESSENTIAL OPERATING DATA . . . . . This is basic information necessary for (Non-cash flow information) proper planning and for proper cash flow projection. In conjunction with this data, the cash flow can be evolved and shown in the above form. A. Sales Volume (Dollars). . . . . This is a very important figure and should be estimated carefully, taking into account size of facility and employee output as well as realistic anticipated sales (Actual sales performed--not orders received) B. Accounts Receivable . . . . . . Previous unpaid credit sales plus current (End of Month) month's credit sales, less amounts received current month (deduct "C" below) C. Bad Debt (End of Month) . . . . Bad debts should be subtracted from (B) in the month anticipated D. Inventory on Hand. . . . . Last month's inventory plus merchandise (End of Month) received and/or manufactured current month minus amount sold current month E. Accounts Payable. . . . . . . . Previous month's payable plus current (End of Months) month's payable minus amount paid during month F. Depreciation. . . . . . . . . . Established by your accountant, or value of all your equipment divided by useful life (in months) as allowed by Internal Revenue Service
Bibliography
Information presented here is necessarily selective and no slight is intended toward material not mentioned. Publishers are invited to notify the SBA of relevant publications and other sources of information for possible inclusion in future editions. Prices of publications and their availability are subject to change. Bibliographies may be reprinted but not used to indicate approval or disapproval by the SBA of any private organization, product or service.
Accounting
Accounting, Finance and Taxation: A Basic Guide for Small Business. Baker, C. Richard, and Hayes, Rick S. 1980. $24.95 cloth. CBI Publishers
Accounting Services for Your Small Business. Lipay, Raymond J. 1983. $29.50 cloth. Ronald Press
Practical Accounting for Small Business. Kirsner, Laura T. 1983. $24.95 cloth. Van Nos Reinhold
Advertising
Advertising and Public Relations for a Small Business. Bellavance, Diane. 1982. $6.95 paper. SBA Books
Advertising and Sales Promotion. Brannen, William. 1983. $19.95 cloth; $9.95 paper. Prentice-Hall
Advertising for the Small Business. Dean, Sandra L. 1980. $4.95 paper. Self Counsel Press
Handbook of Small Business Advertising. Anthony, Michael. 1981. $24.95 cloth. Addison-Wesley
How to Solve Your Small Business Advertising Problems: The All Media Guide to Effective Advertising. Witcher, William K. 1986. $14.95 cloth. Ad Planners
Profitable Advertising Techniques for Small Business. Cook, Harvey. 1981. $10.00 cloth; $8.00 paper. Reston
Profitable Methods for Small Business Advertising. Gray, Ernest. 1984. $24.95 cloth. Ronald Press
Streetfighting: Low-Cost Advertising Promotion Strategies for Your Small Business. Slutsky, Jeff; Woodruff, Woody. 1983. $7.95 paper. Prentice-Hall
Bookkeeping
All About Bookkeeping: A Guide for the Small Business. Hutchinson, Susan. 1982. $6.50 paper. Capricornus Press
Bookkeeping for a Small Business. Bellavance, Diane. 1985. $2.00 paper. DBA Books
Rx for Small Business Success: Accounting, Planning, and Recordkeeping Techniques for a Healthy Bottom Line. Slatter, Jeffrey. 1981. 18.95 cloth; $12.95 paper. Prentice-Hall
Business Plans
Building Your Business Plan: A Step by Step Approach. McLaughlin, Harold J. 1985. $24.95 cloth. Wiley
Business Planning for the Entrepreneur. Williams, Edward E.; Marizo, Salvatore E. 1983. $21.95 cloth. Van Nos Reinhold
Buying and Selling a Business
Buying and Selling a Business. Coltman, Michael M, 1983. $6.95 paper. ISC Pr
Complete Guide to Buying and Selling a Business. Goldstein, Arnold S. 1983. $24.95 cloth. Ronald Press
How to Find and Buy Your Business in the Country. Kirkpatrick, Frank; Griffith, Roger--Editor. 1985. $11.95 paper. Storey Comm Inc.
The Sale of a Small Business. Durin, William H. 1982. $50.00 cloth. Business Sale Institute
Children
Big Bucks for Kids. Leisure, Jan. 1983. $5,95 paper. Andrews & McMeel
Choosing a Business
Cash in on Your Bright Ideas. Siposs, George G. 1980. $14.95 paper. Universal Develop
Earn Money at Home. Davidson, Peter, 1981. $6.95 paper. McGraw-Hill
555 Ways to Earn Extra Money. Levinson, Jay Conrad. 1982. $19.50 cloth. HR&W
How to be Employed and Make a Spectacular Success in an Extra Business of Your Own. Tabares, E. F. 1982. $69.85 cloth. Institute for Economic and Financial Research
How to Generate New Original, Moneymaking Ideas. Mulville, Dean R. 1980. $29.85 cloth. American Classical College Press
How to Pick the Right Small Business Opportunity. Albert, Kenneth J. 1980. $5.95 paper. McGraw-Hill
How to Start a Sideline Business of Your Own and Make a Success Out of It. McPeters, Colin F. 1980. $39.45 cloth. Institute for Economic and Financial Research
Make Money by Moonlighting. Lander, Jack. 1982. $9.95 paper. Enterprise Publishing
No Job? No Sweat!: Make a Potful of Money at Home in Your Own Business. Sharratt. Michael, and Sharratt, Suzanne. 1983. Paper Sharratt & Co.
100 Surefire Businesses You Can Start with Little or No Investment. Feinman, Jeffrey. 1976. $2.95 paper. Playboy Paperbacks
Profit from Your Money-Making Ideas. Holtz, Herman R. 1982. $8.95 paper. AMACOM
Small Business Opportunities. Chapman, A.C. 1984. $9.95 paper. Prentice-Hall
So You Want To Start a Business! Delaney, William A. 1984. $9.95 paper. Prentice-Hall
Collections
Collection Strategies & Techniques. Rutherford, R.D. Andover, James J.--Editor. 1985, $19.95 paper, NACM
Collection Techniques for the Small Business. Paulsen, Timothy R. 1984. $4.95 paper. ISC Pr
The Complete Credits and Collection Starter Success Kit. Revised edition. Scalo, James V. 1981. International Wealth
Credit and Collections for Small Business. Kitzing. Donald R. 1981. $17.95 cloth. McGraw-Hill
Computers
Small Business Computers for First-Time Users. Beaman. I. R. 1983. $21.00 paper. International Publications Service
So You are Thinking about a Small Business Computer. Cannning, R. G., and Leeper, N. C. 1982, $18.95 cloth: $10.95 paper. Prentice-Hall
Understanding and Selecting Small Business Computers: Laboratory Workbook. Gibson, Mary L. 1986. $7.95 paper. Prentice-Hall
Using Small Business Computers. Dologite, Dorothy G. 1984, $25.95 cloth. Prentice-Hall
Using Small Business Computers with Lotus 1-2-3, dBase II & Wordstar. Dologite, Dorothy G. 1985. $25.95 cloth. Prentice-Hall
Word Processing for Small Business. Jong, Steven F. 1983. $11.95 paper. Sams
Cost Accounting
Cost Accounting: Processing, Evaluating and Using Cost Data; Second Edition. Morse, Wayne J. 1981 cloth. Addison-Wesley
Cottage Industry, General
The Best of Both Worlds: A Guide to Home-Based Careers. Anderson, Joan W. 1982. $10.95 cloth; $6.95 paper. Betterway Publications
Climb Your Own Ladder. Lieberoff, Allend. 1982. Simon and Schuster
Cottage Industries. Filbee, Marjorie. 1982. $22.50 cloth. David & Charles
Earn Money at Home. Davidson, Peter. 1981. $6.95. McGraw-Hill
Extra Cash for Women. Gillenwater, Susan, and Dennis, Virginia. 1982. $8.95 paper. Writer's Digest Books
Homebased Businesses. Feldman, Beverly N. (editor). 1982. $6.95 paper. Till Press
Home Inc. Feldstein, Stuart. 1981, $12.95. Grosset and Dunlap
Home Work: The Stay-at-Home Money Book. Judge, Vira H. 1977. $6.95 cloth. Deseret Books
How to Make Money at Home. Shebar, Sharon Sigmond, and Schoder, Judith. 1982. $7.95 paper. Simon & Schuster
How to Start a Business in Your Home and Grow. Witt, Bud, 1980. $12.00 paper. Bud Witt
Money in the Cookie Jar. Kilgo, Edith Flowers. 1980. Paper. Baker Book House
The #1 Home Business Book. Delany, George, and Delany, Sandra. 1981. $4.95 paper. Liberty Publishing
Starting a Mini-Business: A Guidebook for Seniors. Olsen, Nancy; Boore, Sara--Illustrator. 1986. $8.95 paper. Bear Flag Books
Stay Home and Make Money. Von Hoelscher, Russ. 1981. $9.95 paper. Profit Ideas
Turn Your House into a Money Factory. King, Norman. 1982. $6.50 paper. Quill
Women Working at Home: The Homebased Business Guide and Directory. Behr, Marion. 1981. $12.95 paper. WWH Press
Worksteads. Hewes, Jeremy J. 1981. Dolphin Books
Crafts
Creative Cash--How to Sell Your Crafts, Needlework, Designs & Know-How. Brabec, Barbara. 1979. $9.95 paper. Barrington Press
The Goodfellow Catalogue of Wonderful Things No. 3. Weills, Christopher, and Satterlee, Sarah (editors). 1981. $13.95 paper. Chilton Books
Start & Run a Profitable Craft Business. Hynes, William G. 1984. $10.95 paper. ISC Pr
Electronic Cottage
The Electronic Cottage. Deken, Joseph. 1981. $15.95 cloth, Morrow
Employees
Practical Personnel Policies for Small Business. Cohn, Theodore, and Lindberg, Roy A. 1983. $21.95 cloth. CBI Publishing
Staffing a Small Business: Hiring, Compensating & Evaluating. Worthington, Anita E.; Worthington, E. Robert. 1985. $33.95 paper. Oasis
Energy
Reducing Energy Costs in Small Business. IMR Corporation. 1983. $19.95 cloth. Reston
Exporting
How to Prepare and Process Export-Import Documents: A Fully Illustrated Guide. Hicks, Tyler G. 1983. $25.00 paper. International Wealth
Family Business
Family Business and Small Business Suggestions Rhyming Poetry Recital. Alpha Pyramus Staff. 1985. $2.95 paper. Alpha Pyramus
Inside the Family Business. Danco, Leon A. 1982. $19.95 cloth. Prentice-Hall
Success and Survival in the Family Owned Business. Alcorn, Pat. 1982. $19.95 cloth. McGraw-Hill
Financing
Assisting Small Business Clients in Obtaining Funds. 1982. $5.00 paper. American Institute of CPAs.
Business Borrowers Complete Success Kit. 2nd edition. Hicks, Tyler G, 1981. $99.50 paper. International Wealth
Business Capital Sources. 2nd edition Hicks, Tyler G, 1983. $15.00 paper. International Wealth
Financial Tools for Small Business. Carey, Omer; Olson, Dean. 1983. $17.95 paper. Reston
How to Borrow Money from a Bank. Alexander. Don H. 1983. $5.50 paper. DHA & Associates
How to Finance Your Small Business with Government Money: SBA & Other Loans. 2nd edition. Hayes, Rick S., and Howell, John C. 1983, $17.95 paper. Ronald Press
Insider's Guide to Small Business Resources. Gumpert, David E., and Timmons, Jeffrey, 1982. $24.95 cloth. Doubleday
Maximizing Cash Flow: Practical Finance Control for Your Business. Toncre, Emery. 1986. $24.95 cloth. Wiley
The Small Business Guide to Borrowing Money. Goldberg, Philip, and Rubin, Richard. 1980. $24.95 cloth. McGraw-Hill
Small Business Investment Company Directory and Handbook. 2nd edition. Hicks, Tyler G. 1983. $15.00 paper. International Wealth
Start-Up Money: How to Finance Your New Small Business. McKeever, Michael. 1986. $12.95 paper. Nolo Pr
Up-Front Financing: An Entrepneneur's Guide. Silver. A. David. 1982. $15.95 cloth. Ronald Press
Who's Who in Venture Capital. Silver, A. D. 1984. $90.00 cloth. Wiley
Government Regulations
Financial Reporting Requirements of Small Publicly Owned Companies. Arthur D. Little, Inc. 1984, $10.00 paper. Finan Acct
Government Requirements of Small Business. Cole, Roland J., and Tegeler, Philip D. 1980. $21.95 cloth. Lexington Books
Incorporating
Incorporation Handbook for Small Business Owners. Cook, Wade B, 1986. $12.95 paper. Regency Books
Inc. Yourself: How to Profit by Setting up Your Own Corporation. McQuown, Judith, H. 1981. $6.95 paper. Warner Books
Insurance
Insurance Guide for Small Business. Robinson, Gary. 1983. $32.95 cloth. PSI Research
Legal Matters
The Complete Legal Guide for Your Small Business. Adams, Paul. 1982. $19.95 cloth. Ronald Press
Estate Planning for Owners of Small Business. Hamline University Advanced Legal Staff. 1986. $47.70 paper. Hamline Law
Legal Handbook for Small Business. Lane, Marc. 1978. $15.95. AMACOM
The Legal Start-Up Kit. Edwards. Paul and Sarah. 1983. $11.45. Home Enterprises Unlimited
Making the Law Work for You: A Guide for Small Business. Rice, Jerome S., and Libbey, Keith. 1980. $10.95 cloth; $4.95 paper. Contemporary Books
The Small Business Legal Advisor. Hancock, William A. 1986. $9.95 paper. McGraw-Hill
Small Business Legal Handbook. Friedman, Robert. 1985. $49.95 cloth. Enterprise Del
Marketing
Low Cost Market Research: Guide for Small Business. Gorton, Keith, and Carr, Isobel, 1983. $26.95 cloth. Wiley
Practical Marketing for Your Small Retail Business. Brannen, William H. 1981. $16.95 cloth; $7.95 paper. Prentice-Hall
Profitable Sales Management & Marketing for Growing Businesses. Calvin, Robert J. 1984. $31.95 cloth. Van Nos Reinhold
The Secrets of Practical Marketing for Small Business. Holtz, Herman. 1982 $16.95 cloth; $7.95 paper. Prentice-Hall
Start Your Own Store: Managing, Merchandising, and Evaluating. Packard, Sidney, and Carron, Alan J. 1982. $19.95 cloth. Prentice-Hall
Successful Marketing for Small Business. Cohen, William A., and Reddick, Marshall E. 1981. $17.95 cloth. AMACOM
Pensions
Small Business Pensions Plans. Martin, Thomas J. 1982. $15.95 cloth. HR&W
Successful Pension Design for the Small to Medium Size Business. Slimmon, Robert F. 1980. $69.50 cloth, Institute for Business Planning
Promotion and Public Relations
How to Promote Your Business. Hathaway-Bates, John. 1981. $9.25 paper. Asigan Ltd.
The Publicity and Promotion Handbook: A Complete Guide for Small Business. Carlson, Linda. 1981. $19.95 cloth. CBI Publishers
Successful Public Relations Techniques. Kadon, Ann, and Kadon, John. 1976. $5.00 paper. Modern Schools
Purchasing
Effective Purchasing and Inventory Control for Small Business. Dollar, William E. 1983. $22,95 cloth. CBI Publishers
Security
Preventing Crime in Small Business. Clark, Douglas L.; Ramey, Emmett--Editor. 1984. $32.95 paper. PSI Res
Security for Small Businesses. Berger. David. 1981. $15.95 cloth. Butterworth
The Small Business Security Handbook. Keogh, James E. 1980. $15.95 cloth; $7.95 paper, Prentice-Hall
Small Business, General
Beyond Survival: A Business Owner's Guide for Success. Danco, Leon A. 1982. $19.95. Prentice-Hall
Be Your Own Boss: A Step-by-Step Guide to Financial Independence Through Your Own Small Business. Shilling, Dana. 1983. $14.95 cloth, Morrow
Decision Making for Small Business Management. Young, Jerrald F. 1982. $15.50 cloth. Krieger
The Economics of Small Business. Brock, William A.; Evans, David S. 1986. $35.00 cloth. Holmes & Meier
Effective Small Business Management. Hidgetts, Richard M.; Kuratko, Donald, 1986, $22.50 cloth. Academic Press
The Encyclopedia of Small Business Resources: Everything You Need to Know to Help Your Business Prosper. Gumpert. David; Timmons, Jeffrey. 1984. $9.95 paper, Harper-Row
Getting Started. 2nd edition. 1982, $14.95 cloth, Self Counsel Press
Handbook for a Small Office. Wood, Pauline. 1982. $8.95 cloth. Dorrance
Have You Got What it Takes? Mancuso, Joseph R. 1982. $16.95 cloth; $7.95 paper, Prentice-Hall
Honest Business. Phillips, Michael, and Rasberry, Salli. 1981. $10.00 cloth; $6.00 paper. Random House
How to Improve the Profits of any Small Business. Carlson, Dick. 1981. $25.00 cloth. Public Service
How to Make Money in Your Own Small Business. Metcalf, Bunn, 1981. $17.00 cloth; $19.00 paper. Reston
The Independent Woman. Wisely, Rae, and Sanders, Gladys. 1981. $8.95 cloth, J. P. Tarcher
How to Set Up an Effective Filing System. Taylor, Mary Sue. 1981, cloth. National Association of Credit Management
In Business for Yourself. Goldstein. Jerome. 1982. $12.95 cloth; $6.95 paper. Scribner
Making it on Your Own. Feingold, Dr. S. Norman, and Perlman, Dr. Leonard G. 1981. $12.50 cloth. Acropolis Books
Managing Your Small Business. Justis, Robert T. 1981. $24.95 cloth. Prentice-Hall
The Money Manager. Edwards, Paul and Sarah, 1983. $ 14.95, Home Enterprises Unlimited.
Moonlighter's Manual. Swantek, John, 1982. $14.95 paper. Moonlight Press
New Venture Creation: A Guide to Small Business Development. Timmons, Jeffrey A. 1985. $30.95 paper. Irwin
Profit-Line Management: Managing a Growing Business Successfully. Holtz. Herman R. 1981. $17.95 cloth, AMACOM
Profit Secrets for Small Business. Stevens, Mark. 1983. $14.95 paper. Reston
Running Your Own Show: Mastering the Basics of Small Business. Curtin, Richard T. 1982. $17.95 cloth; $3.95 paper. John Wiley
Run Your Own Retail Store. Burstinger, Irving. $19.95 cloth; $22.95 paper. Prentice-Hall
Sell More and Spend Less. Martin, Thomas J, 1980. $15.95 cloth. HR&W
Setting Up Shop. Smith, Randy Baca. 1982. $21.95 cloth; $6.95 paper, McGraw-Hill
Small Business: Look Before You Leap. 2nd edition. Mucciolo Louis. 1981. $8.95 paper. Arco
Small Business Management. 2nd edition. Pickle, H. D., and Abrahson, R. L. 1981. $25.95 cloth. Wiley
Small Business Management: A Guide to Entrepreneurship. Siropolis, Nicholas C. 1985. $30.95 cloth, HM Soft-Ref Division
Small Business Management: How to Start and Stay in Business. Stillman, Richard J. 1982. $18.95 cloth; $10.95 paper, Little, Brown
Small Business Management: Operations and Profile. Tootelain, D. H., and Gaedeke, R. M. 1980. $24.95 cloth. Scott, Foresman
Small Business Management: A Practical Approach. 2nd edition, Sullivan, Daniel J., and Lane, Joseph F. 1983. William C. Brown
Small Business Survival Guide: Sources of Help for Entrepreneurs. Mancuso, Joseph R. 1980, $9.95 paper, Prentice-Hall
Small Firms Growth & Development. Scott; Gibb; Faulkner; Lewis, 1986. $35.00 cloth. Gower Pub Co
Small Time Operator: How to Start Your Own Small Business, Keep Your Books, Pay Your Taxes, and Stay Out of Trouble. Rev. edition, Kamoroff, Bernard. 1983. $8.95 paper. Bell Springs Publishers
Starting and Managing the Small Business. Kuriloff, Arthur, and Hemphill, John, Jr. 1983. $22.95 cloth. McGraw-Hill
Successful Management Strategies for Small Business. Krentzman, Harvey C. 1981. $13.95 cloth; $6.95 paper. Prentice-Hall
Successful Small Business Management. 3rd edition, Tate, Curtis E., Jr.; Megginson, Leon C., and Scott, Charles R., Jr. 1982. $22.50 cloth. Dorsey
Survival of the Small Firm. Stanworth, John; Watkins, D.; Curran, J. 1986. $24.95 cloth. Gower Publishing Co
Sweat Equity: What it Really Takes to Build America's Best Small Companies--By the Guys Who Did It. Smith, Geoffrey; Brown, Paul B. 1986. $17.95 cloth. S&S
Thirty-Six Small Business Mistakes and How to Avoid Them. Stevens, Mark. 1982. $4.95 paper. Prentice-Hall
The Time Manager. Edwards, Paul and Sarah. 1983. $6.20. Home Enterprises Unlimited
Up Your Organization. Dible, Donald. 1981, $10.00. Reston
Untold Facts about the Small Business Game. Blagrove, Luanna C. 1980 $24.95 cloth; $19.95 paper. Blagrove Publications
When Your Name Is on the Door. Brodie, Earl D. 1981, $24.95 cloth, Books in Focus
Specific Home-Based Businesses
Cashing in on Booking. Baker, Nancy C. 1982. $8.95 paper. Contemporary Books
Cater from Your Kitchen. Blanchard, Marjorie P. 1981. $8.95 paper. Bobbs-Merrill
Clowns, Clients, and Chaos: Starting a Hometown Talent Agency for Fun and Profit. Elliott, Tom. 1983. $17.95 paper. TEP
A Complete Guide to Marketing Magazine Articles. Newcomb, Duane, 1975. $9.95 cloth. Writer's Digest Books
Consulting: The Complete Guide to a Profitable Career. Kelley, Robert E. 1981. $17.95 cloth, Scriber's
The Corner Grocery Store. Otten, Catherine. 1980. $4.95 paper. Tech Data
Family Day Care. Squibb, Betsy, 1980. $10.95 cloth, Harvard Common Press
Financial Security and Independence through a Small Business Franchise. Rev. edition. Scherer, Daniel J. 1982. $3.50 paper. Pilot Books
Flea Market Handbook. Miner, Robert G. 1981, $7.95 paper. Berkshire Traveller
Freelance Writing for Profit. Boeschen, John. 1982, $6.95 paper. St. Martin's Press
How to be a Freelance Photographer. Schwartz, Ted. 1980, $4.95 paper. Contemporary Books
How to be a Successful Housewife Writer. Shimberg, Elaine Fantle. 1979. $10.95 cloth. Writer's Digest Books
How to Become a Successful Consultant in Your Own Field. Bermont, Hubert. 1978. $20.00 spiral bound. Bermont Books
How to Become Wealthy Publishing a Newsletter. Mall, E. Jane. 1983. $17.50 paper. International Wealth
How to Create and Market a Successful Seminar or Workshop. Shenson, Howard L, 1981, $27.00 cloth. Bermont Books
How to Earn $25,000 a Year or More Typing at Home. Drouillard, Anne, and Keefe. William F. 1973. cloth, Frederick Fell
How to Set Up and Run a Successful Typing Service. Goodrich, Donna, 1983. $8.95 paper. Wiley
How to Start & Manage a Dance Fitness Business. Holt. Linda. 1984. Paper. Strode
How to Start and Run a Successful Home Typing Business. Glenn, Peggy, 1980. $14.95 paper. Aames-Allen
Start & Run a Profitable Home Typing Business. Aliaga, Barbara, 1984. $9.95 paper. ISC Pr
How to Start Your Own Secretarial Services Business at Home. Kozlow, S. G. 1980. $12.95 cloth. SK Publications
Profitable Part-Time Full-Time Freelancing. Rees, Clair. 1980. $10.95 cloth, Writer's Digest Books
Publishing Newsletter. Hudson, Howard Penn, 1982, $16.95 cloth. Charles Scribner's Sons
Start and Run a Successful Beauty Parlor. Poque, Paul. 1983. Paper. Self Counsel Press
Start and Run a Successful Video Business. Loh, Stan. 1983. $3.95 paper. Royal Court
Successful Free-Lancing. Faux, Marian. 1982. $11.95 cloth. St. Martins Press
Suggestions for Making Money Addressing and Stuffing Envelopes. Doyle, A. C. 1983. $9.95 paper. Center Self
Suggestions for Starting a Business from Businesses that Are Going Out of Business. Doyle, A. C. 1983. $16.95 paper. Center Self
Thirty-Six Thousand Dollars a Year in Your Own Home Merchandising Business. Masser, Darry. 1982, $4.95, Prentice-Hall
Turn Your Kitchen into a Goldmine. Howard, Alice. 1981. $12.95 cloth. Harper and Row
Women Working at Home: The Homebased Business Guide and Directory. Behr, Marion. 1981. $12.95 paper. WWH Press
You Can Sell Your Photos. Scanlon, Henry. 1980. Cloth. Harper and Row
Magazines
Family Circle. Monthly. 488 Madison Avenue, New York, NY 10022.
In Business. Monthly. Box 323, 18 South Seventh Street, Emmaus, PA 18049
Inc. Monthly. 38 Commercial Wharf, Boston, MA 02110.
Money. Monthly. 3435 Wilshire Blvd., Los Angeles, CA 90010.
The Mother Earth News. Monthly. P.O. Box 70, Hendersonville, NC 28791.
Mothering. Monthly. P.O. Box 2046, Albuquerque, NM 87103.
Nation's Business. Monthly. 1615 H Street, NW, Washington, DC 20062.
Salesman's Opportunity. Monthly. Suite 1405, 6 North Michigan, Chicago, IL 60602.
Selling Direct. Monthly. 6255 Barfield Road, Atlanta, GA 30328.
Venture. Monthly. 35 West 45th Street, New York, NY 10036.
The Writer. Monthly. 8 Arlington Street, Boston, MA 02116.
Writer's Digest. Monthly. 9933 Alliance Road, Cincinnati, OH 45242.
Newsletters
Alliance. Quarterly. National Alliance of Homebased Businesswomen, P.O. Box 95, Norwood, NJ 07648.
Art Marketing Letter. 10 issues per year. R. Lubow Presentations, 2282 Highway MM, Oregon, WI 53575.
Behind Small Business. 10 issues per year. Dona Risdall, P.O. Box 37147, Minneapolis, MN 55431.
Boardroom Reports. 26 issues per year. 500 Fifth Avenue, New York, NY 10110.
Business Mailers Review. 24 issues per year. Van H. Seagraves, 1813 Shepherd St., NW, Washington, DC 20011.
The Business Owner. Monthly. 383 South Broadway, Hicksville, NY 11801.
The Business Writer. Twice monthly. Lawrence Ragan Communications, 407 S. Dearborn, Chicago, IL 60605.
The Crafts Report. 11 issues per year. 700 Orange Street, Wilmington, DE 19899.
CBS Washington Alert. Monthly. General Business Services, 51 Monroe Street, Rockville, MD 20850.
DEVA Newsletter. Box C, Burkittsville, MD 21718.
Homebased Entrepreneur Newsletter. J. Esters-Brown Publications, P.O. box 19036, Chicago, Il, 60619.
The INKLING. Monthly. INKLING Publications, P.O. Box 128, Alexandria, MN 56308.
Micro Moonlighter. Monthly. J. Norman Goode, 2115 Bernard Ave., Nashville, TN 37212.
Mind Your Own Business At Home. Bimonthly. P.O. Box 14850, Chicago, IL 60614.
National Home Business Report. Bimonthly. P.O. Box 10423, Springfield, MO 65808.
The Newsletter. Bimonthly. League of N.H. Craftsmen, 205 N. Main Street, Concord, NH 03301.
Open Chain. Monthly. Fiber Designs, P.O. Box 2634, Menlo Park, CA 94025.
PHOTOLETTER. 22 issues per year. Osceola. WI 54020.
The Professional Report. Monthly. 321 Harwood Building, Scarsdale, NY 10583.
Pro-To-Type. Quarterly. Peggy Glenn, 924 Main Street, Huntington Beach, CA 92648.
The Roper Report. Monthly. P.R. Associates, #3 Malaga Cove Plaza, Box 844, Palos Verdes Estates, CA 90274.
Sharing Barbara's Mail. Bimonthly. Artisan Crafts, P.O. Box 10423, Springfield, MO 65808.
Small Business Report. Monthly. 477 Lighthouse Avenue, Monterey, CA 93940.
Tax Angles. Monthly. 901 N. Washington Street, Alexandria, VA 22314.
The Woman's Advocate. Monthly. 3426 American River Drive, Suite 4 Sacramento, CA 95825.
Words At A Stroke. Quarterly. 394 Cakes Blvd., San Leandro, CA 94577.
WP News. Bimonthly. 211 East Olive #210, Burbank CA 91502.
Associations
Associations are often a good source of information and advice. They publish books, magazines, and newsletters and hold national meetings for home-based business owners.
American Craft Council 401 Park Avenue New York, NY 10016 212-696-0710
American Federation of Small Businesses 407 South Dearborn Chicago, IL 60608 312-427-0209
American Home Sewing Council 150 West 20th Avenue San Mateo, CA 94403 415-341-7441
American Society of Artists 1297 Merchandise Mart Plaza Chicago, IL 60654 312-751-2500
American Yarn Spinners Association 601 W. Franklin Avenue Box 99 Gastonia, NC 28052 704-867-7201
Association of Telephone Answering Service 1345 Avenue of the Americas New York, NY 10105 212-586-4050
Center for Entrepreneurial Management 83 Spring Street New York, NY 10012 212-925-7304
Cottage Industry Miniatures Trade Association Box 2603 Lakewood, OH 44107
Council of Smaller Enterprises 690 Union Commerce Building Cleveland, OH 44115 216-621-3300
Direct Selling Association 1730 M Street, Suite 610 Washington, DC 20036 202-293-5760
Handweavers Guild of America 65 Lasalle Road West Hartford, CT 06107 203-233-5124
H.O.M.E. P.O. Box 31446 San Francisco, CA 94131
Homebased Businesswoman's Network 5 Ceder Hill Rd. Salem, MA 01970
Independent Computer Consultants Association P.O. Box 27412 St. Louis, MO 63141 314-567-9708
International Information/Word Processing Association 1015 North York Road Willow Grove, PA 19090 215-657-6300
National Alliance of Homebased Businesswomen P.O. Box 95HB Norwood, NJ 07648 201-768-7829
National Association for the Cottage Industry P.O. Box 14460 Chicago, IL 60614 312-472-8116
National Association for Public Continuing and Adult Education 1201 16th Street, NW Washington, DC 20036 202-833-5486
National Association for the Self-Employed P.O. Box 345749 Dallas, TX 75234 800-255-9626 (in Texas: 800-442-4733)
National Association of Professional Consultants 20121 Ventura Blvd., Suite 227 Woodland Hills, CA 91364 213-703-6028
National Association of Women Business Owners 2000 P Street, NW Washington, DC 20036 202-338-8966
National Business League 4324 Georgia Avenue, NW Washington, DC 20005 202-638-3411
National Federation of Independent Business 150 West 20th Avenue San Mateo, CA 94403 415-341-7441
National Needlework Association 230 Fifth Avenue New York, NY 10001 212-685-1646
National Small Business Association 1604 K Street, NW Washington, DC 20006 202-296-7400
National University Extension Association One Dupont Circle, Suite 360 Washington, DC 20036 202-659-3220
National Writers Club 1450 South Havana, Suite 620 Aurora, CO 80012 303-751-7844
Newsletter Association of America 1341 G Street, NW Washington, DC 20045 202-347-5220
Rural American Women 1522 K Street, NW, Suite 700 Washington, DC 20005
Small Business Foundation of America 69 Hickory Drive Waltham, MA 02154
Smaller Manufacturers Council 399 Boulevard of the Allies Pittsburgh, PA 15222 412-391-1622
Society of Professional Journalists 840 North Lake Shore Drive. Suite 801W Chicago, IL 60611 312-649-0060
United Federation of Small Business 4817 Palm Avenue, Suite A Box 936 La Mesa, CA 92041 714-464-0746
Publishers Names and Addresses
If a publisher is not listed, check with your local bookstore.
Aames-Allen Publishing Company 924 Main St. Huntington Beach, CA 92648 714-536-4926
Academia Press P.O. Box 125 Oshkosh, WI 54901 414-235-8362
Acropolis Books 2400 17th St., NW Washington, DC 20009 202-387-6805
Addison-Wesley Distribution by: Matrix Publications 27 Benefit St. Providence, RI 02904 401-421-2068
AMACOM 135 W. 50th St. New York, NY 10020 212-586-8100
American Classical College Press P.O. Box 4526 Albuquerque, NM 87106 505-843-7749
American Institute of CPAs 1211 Avenue of the Americas New York, NY 10036 212-575-6200
Andrews and McMeel, Inc. 4400 Johnson Drive Fairway, KS 66205 913-362-1523
Arco Publishing 215 Park Ave., South New York, NY 10003 212-777-6300
Argus Communications One DLM Park Box 5000 Allen, TX 75002 214-247-6300
Ballantine Books 400 Hahn Rd. Westminster, MD 21157 212-751-2600 (NY Office)
Berkshire Traveller Press Pine Street Stockbridge, MA 01262 413-298-3636
Bermont Books 815 15th St., NW Suite 1108 Washington, DC 20005 202-737-6437
Betterway Publications c/o Berkshire Traveller Press Pine Street Stockbridge, MA 01262 413-298-3636
Bibliotheca Press P.O. Box 98378 Atlanta, GA 30359 404-588-1328
Bobbs-Merrill Company 4300 W. 62nd St. Indianapolis, IN 46468 317-298-5400
Barnes and Noble Books 10 E. 53rd St. New York, NY 10022 212-593-7000
Bell Springs Publishers P.O. Box 640 Laytonville, CA 95454 709-984-6746
Books in Focus 160 E. 38th St. Suite 31B New York, NY 10016 212-490-0334
Brown, William C. 2460 Kerper Blvd. Dubuque, IA 52001 319-588-1451
Business Sale Institute 170 Park Center Plaza Suite 202 San Jose, CA 95113 408-286-4850
Butterworth Publications 10 Tower Office Park Woburn, MA 01801 617-933-8260
CBI Publishing Company 51 Sleeper St. Boston, MA 02210 617-426-2224
Chilton Book Company School and Library Services Chilton Way Randor, PA 19089 215-687-8200
Contemporary Books 180 N. Michigan Ave. Chicago, IL 60601 312-782-9181
Crown Publications 1 Park Ave. New York, NY 10016 212-532-9200
David & Charles, Inc. P.O. Box 57 North Pomfret, VT 05053 802-457-1911
Delmar Publishing Company 7625 Empire Drive Florence, KY 41042 606-525-6600
Deseret Book Company 40 E. South Temple P.O. Box 30178 Salt Lake City, UT 84130 801-534-1515
Devin-Adair Company 143 So. Beach Ave. Old Greenwich, CT 06870 203-637-4531
Dilithium Press 11000 S.W. 11th St. Beaverton, OR 97005 503-646-2713
Dolphin Books 501 Franklin Ave. Garden City, NY 11530 516-294-4561
Dorrance and Company 828 Lancaster Pike Bryn Mawr, PA 19010 215-527-7880
Dorsey Press 1818 Ridge Rd. Homewood, IL 60430 312-798-6000
Doubleday and Company 501 Franklin Ave. Garden City, NY 11530 516-294-4561
Enterprise Del 725 Market St. Wilmington, DE 19801 302-654-0110
Farnsworth Publishing Co. 78 Randall Ave. Rockville Center, NY 11570 516-536-8400
Fell Publications 386 Park Ave., South New York, NY 10016 212-685-9017
Goldberg, J. M. 1735 K St., NW Suite 200 Washington, DC 20006
Greene Press Fessenden Rd. at Indian Flat P.O. Box 1000 Brattleboro, VT 05301 802-257-7757
Grosset and Dunlap 51 Madison Ave. New York, NY 10010 212-689-9200
Gustafson House GHS Sales Dept. R-01 P.O. Box 299 Ft. Calhoun, NE 68023
Harbor Publishing c/o EMC Publishing 300 York Ave. St. Paul, MN 55101 415-775-4740 (CA office)
Harper-Row Publishers Orders to: Keystone Industrial Park Scranton, PA 18512 212-593-7000 (NY office)
Harvard Common Press c/o Independent Publishers Group David White, Inc. One Pleasant Ave. Port Washington, NY 11050 612-772-6842
Hayden Book Company 50 Essex St. Rochelle Park, NJ 07662 201-843-0550
Home Enterprises Unlimited 677 Canyon Crest Drive Sierra Madre, CA 91024 213-355-0800
Houghton Mifflin Company (HM) Wayside Road Burlington, MA 01803 617-272-1500
HR&W 8 Madison Ave. New York, NY 10017 212-872-2000
Institute for Business Planning IBP Plaza Englewood Cliffs, NJ 07632 201-592-2034
Institute for Economic and Financial Research P.O. Box 4526 Albuquerque, NM 87196 505-843-7796
Institute of Industrial Engineers 25 Technology Park/Atlanta Norcross, GA 30092 404-449-0460
International Publications Service 114 E. 32nd St. New York, NY 10016 212-685-9351
International Wealth Success 24 Canterbury Rd. Rockville Center, NY 11570 516-766-5850
Irwin, Richard D. 1818 Ridge Rd. Homewood, IL 60430 312-798-6000
Krieger Publishing Company P.O. Box 9542 Melbourne, FL 32901 305-724-9542
Lexington Books c/o D.C. Heath and Company 125 Spring St. Lexington, MA 02173 617-862-6650
Liberty Publishing Company 50 Scott Adam Rd. Cockeysville, MD 21030 301-667-6680
Lifetime Learning Publications 10 Davis Drive Belmont, CA 94002 415-595-2350
Little, Brown and Company 200 West St. Waltham, MA 02154 617-890-0250
McGraw-Hill Book Company 1221 Avenue of the Americas New York, NY 10020 212-997-1221
Mississippi, University of Bureau of Business and Economic Research University, MS 38677 601-232-7481
Modern Schools 4225 N. Brown Ave. Scottsdale, AZ 85251 602-945-1832
Moonlight Press 611 Pawling Ave. Troy, NY 12180
Morrow, William and Company Wilmor Warehouse 6 Henderson Dr. West Caldwell, NJ 07066 212-889-3050 (NY office)
National Association of Credit Management Book Editing Dept. 475 Park Ave., So. New York, NY 10016 212-578-4431
National Textbook Company 4255 Touhy Ave. Lincolnwood, IL 60646 312-679-4210
New Century Books 220 Old New Brunswick Rd. Piscataway, NJ 08854 201-981-0820
Norton, W. W. and Company 500 Fifth Ave. New York, NY 10110 212-354-5500
Padre Productions P.O. Box 1275 San Luis Obispo, CA 93406 805-543-5404
Para Publishing c/o Baker & Taylor 50 Kirby Ave, Sommerville, NJ 08876 805-968-7277 (CA office)
Petrocelli Books 1101 State Rd. Princeton, NJ 08540 609-924-5851
Pilot Books 347 Fifth Ave. New York, NY 10016 212-685-0736
Playboy Paperbacks 1633 Broadway New York, NY 10019 212-245-9160
Prentice-Hall Box 500 Englewood Cliffs, NJ 07632 201-592-2000
Profit Ideas 8361 Vickers St. Suite 304 San Diego, CA 92111
PSI Research 1287 Lawrence Station Rd. Sunnyvale, CA 94086 408-745-7093
Public Service Publications 1523 W. 8th St. Los Angeles, CA 90017 213-484-1088
Quill 105 Madison Ave. New York, NY 10016
Random House 400 Hahn Rd. Westminster, MD 21157 212-751-2600 (NY Office)
Reston Publishing Company Distributor: Prentice-Hall Box 500 Englewood Cliffs, NJ 07632 703-437-8900 (Reston Company office)
Ronald Press 605 Third Ave. New York, NY 10158 212-850-6418
Royal Court Reports P.O. Box 927 Aberdeen, MS 39730
Sams, Howard W. and Co. 4300 West 62nd St. Indianapolis, IN 46206 317-298-5400
Scott, Foresman and Company 1900 E. Lake Ave. Glenview, IL 60025 312-729-3000
Scribner, Charles and Sons 597 Fifth Ave. New York, NY 10017 212-486-2703
Self Counsel Press 1303 N. Northgate Way Seattle, WA 98133 206-522-8383
Sharratt and Company P.O. Box 2171 SGB Littleton, CO 80161
Simon and Schuster 1230 Avenue of the Americas New York, NY 10020 212-245-6400
SK Publications 7149 Natalie Blvd. Northfield Center, OH 44067
Small Business Publications Box 5SC 800 Beares Way Hyannis, MA 02601
Sterling Publishing Company 2 Park Ave. New York, NY 10016 212-532-7160
St. Martin's Press 175 Fifth Ave. New York, NY 10010 212-674-5151
Tech Data Publications 6324 W. Fond Du Lac Ave. Milwaukee, WI 53218
Till Press P.O. Box 27816 Los Angeles, CA 90027
Transatlantic Arts, Inc. 88 Bridge Rd. Central Islip, NY 11722 516-234-0055
Universal Development Publishers 2855 Velasco Lane Costa Mesa, CA 92626 714-540-5452
Van Nostrand Reinhold c/o: Lepi Order Processing 7625 Empire Dr. Florence, KY 41042 212-265-8700 (NY office)
Warner Books c/o Independent News Company 75 Rockefeller Plaza New York, NY 10019 212-484-8000
Weybridge Publishing Company 16911 Brushfield Dr. Dallas, TX 75248 214-233-1151
Wiley and Sons (Wiley-Interscience) 605 Third Ave. New York, NY 10158 212-850-6418
Witt, Bud P.O. Box 2527 4212 W. Olive Fullerton, CA 92633
Writer's Digest Books 9933 Alliance Rd. Cincinnati, OH 45242 513-984-0717
WWH Press P.O. Box 237 Norwood, NJ 07648 201-548-7524
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