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Thread: Business Plans: The Financials that should be included

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    Diamond Member Vanash Naick's Avatar
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    Business Plans: The Financials that should be included

    The financials of a business plan: start up business

    1. Financials ought to start with start up expenses. These are the expenses you incur before you start trading. You need to motivate how you intend to obtain the finance for the expenses and the initial assets. This is where borrowing of money from a bank or bringing in investors comes in. Your start up costs should ideally be in a spreadsheet or financial table. All numbers must be properly explained from the start up table;
    2. Sales forecast: You need to motivate from figures in a forecasted spreadsheet what sales you expecting for a 3 year period. Even though this is a calculated guess it must be realistic, measureable and attainable;
    3. Break even analysis: All break even assumption which you have in your break even analysis table and chart must be motivated. Breakeven points should be compared to sales forecasts.
    4. Income statement( AKA Profit and loss statement);
    5. 3 year projected income statement;
    6. 3 year cash flow forecast: The business has to be able to generate cash and cash equivalents.
    7. Balance Sheet: Motivate the figures in your balance sheet;

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    Diamond Member adrianh's Avatar
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    Did you do an MBA?
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    Diamond Member Vanash Naick's Avatar
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    No Adrian, I have not obtained a MBA. Let it suffice that I say. I have indeed obtained a National Diploma(Business management: Technikon Witwatersrand 1994); several additional subjects for non degree purposes e.g Advanced management practice: 2003: TSA. I have obtained 10 years of corporate management experience and as previously mentioned I am currently working towards a LLB.

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    Diamond Member adrianh's Avatar
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    Do you run a small business?

    I'm not trying to get clever, I don't have a MBA. I'm just interested!
    How easily someone is offended is directly proportional to how stupid they are.
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    Diamond Member Vanash Naick's Avatar
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    Adrian, I run a small business from home. What I've essentially done is pooled together 2 Bcom graduates, currently doing articles, 2 LLb students in their 3 year and 2 Candidate attorney's currently doing articles. The single most important objective we have is to offer a variety of quality services at a far cheaper price that would the case be if one recruited the services of an attorney, management consultant or chartered account.
    In essence, it's simply the dynamics of the free market system which I support especially freedom of choice of the consumer in selecting a store to buy goods from or utilising the services of the business of their choice.
    I personally think the MBA is a very good qualification to obtain. It's a reputable academic aquirement. It's not a career part for me though. I have resigned myself to obtaining a LLB. That said, I have a profound respect for individuals who have obtained this qualification!

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    wynn (30-Dec-11)

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    Diamond Member Blurock's Avatar
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    An MBA will not necessarily make you a good manager or businessman.

    Often the "uneducated" have more knowledge than some graduates. This knowledge comes through experience and by learning from others, as well as from own mistakes. If you are hungry for knowledge, you will learn, but even the learned are sometimes ignorant.
    Excellence is not a skill; its an attitude...

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    Vanash Naick (31-Dec-11)

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    Diamond Member adrianh's Avatar
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    You know, my brother had an interesting saying when he was the MD of a fairly well known bank: "He did a BCOM LLB CA & MBA. Then he spent 30 years working his way up through the bank....and after all of that he's now a psychologist" He said that 10% of his day was spent on banking issues and the rest, the difficult part, was spent on people issues.
    How easily someone is offended is directly proportional to how stupid they are.
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    Vanash Naick (31-Dec-11)

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    Diamond Member Blurock's Avatar
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    Business is all about people. It starts with managing your workforce and motivating them to get the best productivity and results. You also deal with suppliers and have to negotiate on time deliveries at the right price.

    Then, just when you think you have all your ducks in a row, you realise that there is a customer to deal with - the reason for your existence!

    In all these steps or situations you have to talk to people. Motivate staff, negotiate wages, disciplinary actions etc. You have to negotiate prices and terms with both suppliers and customers. Your whole life and your business is about give and take and how to reach a win-win situation to satisfy everyone.

    Maybe business is more about negotiation skills than all the stuff we learn at Business School!
    Excellence is not a skill; its an attitude...

  12. Thanks given for this post:

    Vanash Naick (01-Jan-12)

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