''By failing to prepare, you are preparing to fail'' - Benjamin Franklin

Process Street’s Financial Planning Process is a guide to aid you through the process of producing a financial plan for your small business.

1

Introduction:

2

Record checklist details

3

State assumptions using your income statement:

4

Create the required financial statements

5

Assume your growth rate

6

Calculating compound annual growth rate

7

Assume your cost of goods sold

8

Calculating cost of goods sold

9

Assume your general and administrative expenses

10

Assume depreciation

11

Calculate depreciation and amortization

12

Assume interest expense

13

Assume unusual items

14

Assume tax rate

15

Communicate your assumptions

16

State assumptions using your balance sheet:

17

Assume accounts receivable

18

Assume inventory

19

Assume other current assets

20

Assume accounts payable

21

State assumptions using your cash flow:

22

Assume your capital expenditure

23

Assume your debt insurance

24

Assume you equity insurance

25

Assume your cash from dividends

26

Project forwards for income statement:

27

Calculate the gross profit

28

Forecast SGA costs

29

Forecast depreciation and amortization costs

30

Forecast long term debt

31

Forecast net interest expense

32

Forecast operating income

33

Forecast unusual items

34

Forecast earnings before taxes

35

Forecast tax expenses

36

Forecast net income

37

Project forwards for the balance sheet:

38

Forecast capital expenditure

39

Forecast accounts receivable

40

Forecast other current assets

41

Forecast inventory

42

Forecast accounts payable

43

Project forwards for the cash flow statement:

44

Add the required information from the income statement to the cash flow statement

45

Forecast receivables

46

Forecast Inventory

47

Forecast account payable

48

Forecast other items

49

Forecast cash flow from operations

50

Forecast cash from investing

51

Forecast cash from financing

52

Forecast pre-forward transactions change in cash

53

Forward transactions adjustment

54

Forecast net change in cash

55

Project forwards for the balance sheet continue:

56

Forecast other current liabilities

57

Forecast total current liabilities

58

Forecast other long term liabilities

59

Forecast total liabilities

60

Forecast other long term assets

61

Forecast cash

62

Forecast total current assets

63

Forecast total assets

64

Forecast stock per capita

65

Forecast retained earnings

66

Forecast minority interest

67

Forecast total equity

68

Forecast total liability and equity

69

Check to see if your forecast balance sheet is balanced

70

Sale forecasts:

71

Ask yourself key questions

72

Determine your market segment

73

Perform quantitative sales forecasting

74

Perform qualitative sales forecasting

75

Financial plan production:

76

Get ready to produce your financial plan

77

Sources:

78

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