Reading
The third lesson, “Estimating The Finances,” is a comprehensive guide to financial planning for your business, focusing on creating a robust financial framework using Sheets. This lesson begins with a detailed approach to estimating expenses, helping you understand and categorize the various costs associated with starting and running your business. You will learn how to calculate total expenses and capital requirements, a vital step in financial preparation. The lesson then advances to projecting profit and loss, teaching you to foresee your business’s financial performance over time. You’ll gain skills in adding complex calculations to your financial models, enhancing their accuracy and utility. A key component of this lesson is incorporating financing information, which includes understanding different financing sources and how they impact your financial plan. You’ll create an opening day balance sheet, which serves as a snapshot of your business’s financial position at launch. Personal financial statements are also covered, providing a clear picture of your personal financial involvement in the business.
Cash flow projection is another critical aspect, enabling you to visualize how cash is expected to move in and out of your business. This is complemented by the creation of a projected balance sheet, giving you a forward-looking view of your business’s financial health. The lesson concludes with two essential analytical tools: completing a breakeven analysis, which identifies when your business will be able to cover its costs and start generating profit, and preparing use of capital statements, which detail how you plan to allocate and use the funds you acquire for your business.