1200 words -4 hours deadline

Chapter 11

Creating a Successful Financial Plan 405

Basic Financial Statements 406

The Balance Sheet 406

The Income Statement 408

The Statement of Cash Flows 410 Creating Projected Financial Statements 411

Projected Financial Statements for a Small Business 411

Ratio Analysis 415

Twelve Key Ratios 416

◼ YOU BE THE CONSULTANT The Challenges of Debt 420 Interpreting Business Ratios 427

◼ YOU BE THE CONSULTANT All Is Not Paradise in Eden’s Garden: Part 1 428 What Do All of These Numbers Mean? 431 Break-Even Analysis 434

◼ YOU BE THE CONSULTANT All Is Not Paradise in Eden’s Garden: Part 2 434 Calculating the Break-Even Point 435 Adding a Profit 436 Break-Even Point in Units 437 Constructing a Break-Even Chart 438 ◼ YOU BE THE CONSULTANT Where Do We Break Even? 439 Using Break-Even Analysis 439 Chapter Summary by Learning Objective 440 • Discussion Questions 441 • Beyond the Classroom... 441 • Endnotes 441

Chapter 12

Managing Cash Flow 442

Cash Management 443

Cash and Profits Are Not the Same 447

The Cash Budget 448

Step 1: Determining an Adequate Minimum Cash Balance 452

Step 2: Forecasting Sales 452

Step 3: Forecasting Cash Receipts 453

◼ HANDS ON... HOW TO Manage Cash Flow in a Highly Seasonal Business 454 Step 4: Forecasting Cash Disbursements 456 Step 5: Estimating the End-of-Month Cash Balance 457 The “Big Three” of Cash Management 458

◼ YOU BE THE CONSULTANT In Search of a Cash Flow Forecast

Scarborough, Norman M; Cornwall, Jeffrey R. (2015-02-18T22:58:59). Essentials of Entrepreneurship and Small Business Management (2-downloads) (p. 11). Pearson Education. Kindle Edition.

Accounts Payable 466

◼ HANDS ON... HOW TO Avoid Losses from Accounts Receivable 467

Inventory 468

Avoiding the Cash Crunch 471

Barter 472

Trim Overhead Costs 473

◼ YOU BE THE CONSULTANT Controlling Employee Theft 477

Conclusion 478 Chapter Summary by Learning Objective 479

• Discussion Questions 479 •

Beyond the Classroom... 480 •

Endnotes 480 SECTION IV Putting the Business Plan to Work: Sources of Funds 481

Chapter 13

Sources of Financing: Equity and Debt 481

Equity Capital versus Debt Capital 484

Sources of Equity Financing 484

Personal Savings 484

Friends and Family Members 485

Crowd Funding 486

◼ HANDS ON... HOW TO Structure Family and Friendship Financing Deals 487

Accelerators 488

◼ HANDS ON... HOW TO Crowdfunding 489

Angels 490 Venture Capital Companies 493

Corporate Venture Capital 497 P

ublic Stock Sale (“Going Public”) 497

Sources of Debt Financing 501

Commercial Banks 502

Short-Term Loans 502

Intermediate- and Long-Term Loans 503

◼ HANDS ON... HOW TO Get a Bank to Say “Yes” to Your Loan Application 504 The Small Business Administration (SBA) Loan Guarantee Programs 506

◼ YOU BE THE CONSULTANT The Never-Ending Hunt for Financing 507

] Other SBA Loan Programs 510

] Nonbank Sources of Debt Capital 511

Other Federal and State Programs 514

Economic Development Administration

Scarborough, Norman M; Cornwall, Jeffrey R. (2015-02-18T22:58:59). Essentials of Entrepreneurship and Small Business Management (2-downloads) (p. 12). Pearson Education. Kindle Edition.

U.S. Department of Agriculture’s Business Programs and Loans

515 Small Business Innovation Research Program 516

Small Business Technology Transfer Program 516

State and Local Loan Development Programs 516

Other Methods of Financing 517 Factoring Accounts Receivable 517

Leasing 518 ROBS 518 Merchant Cash Advance 519

Peer-to-peer Lending 519

Loan Brokers 519

Credit Cards 519

Chapter Summary by Learning Objective 520 •

Discussion Questions 521

• Beyond the Classroom... 522 •

Endnotes 523

Chapter 14

Choosing the Right Location and Layout 524

Location: A Source of Competitive Advantage 525

Choosing the Region 526

Choosing the State 529

Choosing the City 535

◼ ETHICS AND ENTREPRENEURSHIP “Wait, You Can’t Take Our Location... Can You?” 540

Choosing the Site 541

Location Criteria for Retail and Service Businesses 542 Trade Area Size 542

◼ YOU BE THE CONSULTANT “Pop” Goes the Store 543

Retail Compatibility 544

Degree of Competition 544

The Index of Retail Saturation 544

Reilly’s Law of Retail Gravitation 545

Transportation Network 546

Physical and Psychological Barriers 546

Customer Traffic 546

Adequate Parking 546 Reputation 547

Visibility 547 Location Options for Retail and Service Businesses 547

Central Business District 548

Neighborhood Locations 549

Shopping Centers and Malls 549

] Near Competitors

Scarborough, Norman M; Cornwall, Jeffrey R. (2015-02-18T22:58:59). Essentials of Entrepreneurship and Small Business Management (2-downloads) (p. 12). Pearson Education. Kindle Edition.