Transcript Financial Management - Megan Marlowe

Financial Management
Guide to building a
budget
• Are you going to have a:
– Non-profit business
– For profit business
– Create a new public entity
NON-PROFIT BUSINESS
• Funding to get 501 (c) tax status
• Steps in meeting requirements to get
501 (c) started
• Grants
• Donations
– (Need a mix of grants and donations)
FOR PROFIT
• Funding - how will you pay for start up
and cost of operations
– Loan – Interest rates, collateral, terms
• Small business loan
• Conventional loan
• Business formation
– LLC
– Corporation
– Partnership
– Sole Proprietor
PUBLIC RECREATION
 Traditionally use tax money as their
primary source of revenue
 User fees and other funding sources
supplement taxation
 Grants
 Outsourcing?
• http://www.sos.ms.gov/business_services_bu
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siness_formation.aspx business formation
http://www.irs.gov/ taxes
http://www.petfinder.com/admincontent/admin-501c3.html good resource for
501 (c) information
http://www.irs.gov/publications/p557/index.h
tml 501 (c) information
http://www.grants.gov/ grants available
http://www.sba.gov/ small business
association
 Major functions of financial
management can be done through the
executive summary
 Determine the scope and content of fiscal
policies
 Obtain the best possible mix of financing
alternatives
Executive Summary summarizes:
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The Mission Statement – This explains what your business is
all about. It should be between several sentences and a
paragraph.
Company Information – Include a short statement that
covers the names of the founders and their roles, your number
of employees, and your business location(s).
Your Products/Services -- Briefly describe the products or
services you provide.
Financial Information – information about your plan for
financing
Summarize future plans – Explain where you would like to
take your business.
With the exception of the mission statement, all of the information in the
executive summary should be covered in a concise fashion and kept to one
page. The executive summary is the first part of your business plan many
people will see, so each word should count.
• http://www.bplans.com/bakery_busines
s_plan/executive_summary_fc.php
• What are your cost centers going to be?
• It will be difficult to create a budget for your business
without organizing your expenses first. Start by
making a list of everything you spend money on
related to the business. Sort them by use, like
utilities, payroll and advertising, then itemize specific
spending allotments.
• Some expenses have a fixed rate, like costs
for mailing regular shipments to a long-term
client, while others, like utilities, will vary
from week to week or monthly. Categorize
these expenses separately in your budget. It
will be easy to budget amounts for fixed
expenses first, whereas variable amounts will
require more budgeting savvy.
• Your budget will be partially based on
your projected or estimated income. Be
realistic and rational when you
determine this number.
• Input unchanging expenses such as
rent, loan payments or pre-paid costs
for "Fixed Expenses" and changing
expenses such as utilities, supplies, etc.
for "Variable Expenses." Determine
budgeted expenses by averaging past
expenses in each category.
• Insert your forecasted income from
earnings and any other expected
revenue sources under the "Budgeted"
subheading for "Income.“
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Mortgage or rent on the office
Payroll expenses (salaries, benefits, etc.)
Utilities
Insurance
Office Supplies
Marketing and advertising
Inventory
Maintenance costs
Taxes and legal fees
Interest on money owed
Janitorial supplies
Misc
• http://www.prm.nau.edu/prm426/samp
le_line_item_budget_format.htm
• http://bizfinance.about.com/od/busines
sbudgeting/a/budget_wksheet.htm