Post a new topic
    6 Replies Latest reply on Sep 7, 2008 2:41 PM by Santa Fe CPA

    Starting a business plan

    rahinson Wayfarer
      I have been in the process of making my business plan for an outdoors sporting goods store, and have used very conservative numbers to coincide with what I think is possible for sales. I'm at the Profit and Loss section of the Business Plan, and I have negative numbers at the bottom of Net Profit/Sales. To get this number to the positive, we must have more sales (which is very possible because I used very conservative numbers); Do away with paying ourselves (which we intend to do, but I left the money in there in case we have to hire employees); or is this normal to have negative numbers the 1st year when we dont have actual sale figures? How will the bank react, or do I need to inflate the numbers to there maximum potential instead of being conservative?
        • Re: Starting a business plan
          LUCKIEST Guide
          Starting a business plan, Welcome

          Tell me more. Where are you?? Do you have an Accountant??

          Do you know about SCORE?? SCORE is FREE both in person and on line.

          Great question to ask SCORE.

          Good luck, LUCKIEST
          • Re: Starting a business plan
            Santa Fe CPA Adventurer
            Hello there Rahinson,

            First & foremost it is normal for a new business to show financial losses during its early years. Any financial institution would be quite leery of a new business that showed a profit right out of the box. Do not inflate your revenues or minimize the expenses for the first couple of years. Any financing that you obtain with these figures, when they do not pan out, could very easily put you in jeopardy for fraudulent documentation. Most financing documents will contain a clause concerning the truth of the statements and you will certify those figues as being true under penalty of law.

            Do as Luckiest says and hire an accountant to help you with your business plan & financing proposal.
            1 of 1 people found this helpful
              • Re: Starting a business plan
                rahinson Wayfarer
                Has anyone used the Premier Edition Business Plan Pro? Seems very confusing and hard to understand. Been trying to get through it so I can get submitted to the Bank.
                • Re: Starting a business plan
                  rahinson Wayfarer
                  Santa Fe,
                  In our business plan, we provide a salary (very minimal)to ourselves just to scrape by the first year. In order to start this business we are having to put all of our savings in it to get financed and get started. Everyone we talk to says that we will never make it paying ourselves a dime for the first year. There is no way to not pay ourselves with losing all the savings. This just a myth? or do you already have to be rich to start a business.
                    • Re: Starting a business plan
                      Santa Fe CPA Adventurer
                      Hi there Rahinson,

                      In starting a business you are taking a risk, whether you are wealty of poverty srticken. Virtually all small businesses are begon with only the owner's savings, if any, as capital and as a result, if the business es undercapitalized and goes through a tough patch,. the savings is what can pull it through. You must consider the risk of losing all your savings before you even open the doors of the business.

                      It is highly probable that you will have a negative cash flow and show significant financial losses for the early days of operations while gettimng yourself established and building a recurring customer base.

                      If you are as poorly capitalized as it seems that you are, then I suggest that you not give up your regular job until the cash flow is positive. As the captain you must be willing to go down with rthe ship.