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Financial Planning & Management
Financial planning for your start-up business is the part of the process that determines
whether or not your business is viable in the market, and it will be a key in determining
whether or not your business plan is going to be able to attract the banker's attention if you
decide to request start-up capital from the bank. More importantly, it will be the final word
on whether or not you see the potential success for the financial investment you're about to
You can summarize your financial planning project by viewing three key financial reports.
1. Your income statement
2. Your cash-flow projection
3. Your balance sheet
You will need to create each of these three reports with all of the financial data that is re-
quired to start your business, and you'll start by reviewing your expenses. In fact, break up
your expenses into two categories: your start-up expenses and your operating expenses.
Just as simply as it's stated, your start-up expenses are all of the costs that are involved in
getting your business up and running. These will include:
n Your business license registration fees n Starting inventory
n Office furniture
n Computer equipment
n Telephone equipment
This is just a small sample of start-up expenses; your own list will grow as you start gath-
ering the data and writing it down as purchases are needed and made.
Operating expenses are the costs associated with keeping your business up and run-
ning.These are also called ongoing expenses and will show up consistently in your profit-
and-loss statement. A short list of operating expenses may include:
n Monthly telephone fees n Internet service
n Inventory
n Utilities
n Salaries
n Rent
n Consumable office materials n Maintenance
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