Entrepreneurship Research Guide : Projecting Financials
This guide is a collaborative effort between the Wisconsin School of Business and the Business Library.
Projecting Financials
- Start with a sales forecast - 3 years
- Create an expenses budget
- Develop a cash-flow statement
- Income projections
- Deal with assets and liabilities
How much profit will you earn? When?
- What percent of your total costs are variable?
- What percent of your total costs are fixed?
- What is your contribution margin for each month, year and/or product?
- What is your contribution margin as a % of sales?
Describe your financial projections
- What are the assumptions behind your revenue projections?
- Make sure you document those in your projections
Phil Greenwood Videos on Company Financials
Suggested readings
Streetsmart Financial Basics for Nonprofit Managers, Third Edition by ISBN: 9781118386705Publication Date: 14 MAR 2012A practical guide to understanding and managing the finances of a nonprofit organization.
Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist, Second Edition by ISBN: 9781119204152Publication Date: 10 OCT 2015This resource outlines the essential elements of the venture capital term sheet-from terms related to economics to terms related to control. It gives a balanced view of the particular terms along with the strategies to getting to a fair deal. In addition to examining the nuts and bolts of the term sheet, Venture Deals, Second Edition also introduces you to the various participants in the process and discusses how fundraising works
- The Perils of Seeking Financing at the Wrong Time. By Phil GreenwoodAugust 2017. The timing of external funding for a new venture can have dramatic impact on its survival and success
- A More User-Friendly Way to Track Liquidity. By Phil GreenwoodJune 2016. “Return on Equity” provides a general indicator of the level of earnings and operational cash flow a firm generates in relation to the cost of long term capital invested in the enterprise. As many entrepreneurs realize, “cash flow is king and queen” in a company’s financial management practices. But most traditional liquidity measures have inherent weaknesses, especially at privately held firms headed by entrepreneurs with little or no financial background. An alternative cash flow metric, the Net Balance Position (NBP) provides a simpler yet more effective way to measure the liquid situation of these firms. This article explains why, and shares some strategies that can increase cash flow of the enterprise.
- How to Grow Your Firm the Right Way. By Phil GreenwoodSeptember 2016. For most new business owners, growth is a sign that the business is successful. But depending on that business's financial structures and its commitment to shareholders, growth can complicate things. This article will introduce a simple but powerful financial metric that provides a realistic idea of how much the company can grow based on its profitability, earnings retention, financial structure and "asset velocity." Once a business owner/manager has identified the current earnings power and liquidity position of the firm, he or she can then ascertain the company’s sales growth based on current financial conditions.
Library Resources
RMA Annual Statement StudiesCall Number: Reserves HF5681 B2 R6Publication Date: 1977-currentContains composite financial data on manufacturing, wholesaling, retailing, service, and contracting lines of business. Arranged by SIC code, this work makes it possible to compare one company's performance relative to other companies in the same line of business. Earlier editions in upper level Reference Area.
