The Business Plan For Homebased Business (5)

APPENDIX A1

PROFIT AND LOSS PROJECTION

REVENUE (Sales)

Exclude from the Revenue section any revenue that is not strictly related to the business.

COST OF SALES

EXPENSES

Net Profit -- To find net profit, subtract total expenses from gross profit.

APPENDIX B

Company Name 
1 BALANCE SHEET 
As of (current date) 
2 ASSETS LIABILITIES 7 
Current Assets Current Liabilities 
Cash $____ Accounts payable $____ 
Accounts receivable $____ Short-term notes $____ 
less allowance for Current portion 
doubtful accounts $____ of long-term notes $____ 
Net realizable value $____ Interest payable $____ 
Inventory $____ Taxes payable $____ 
Temporary investments $____ Accrued payroll $____ 
Prepaid expenses $____ Total Current Liabilities $____ 8 
 Total Current Assets $____ Long-Term Liabilities 
Long-Term Investments Notes payable $____ 
(detailed list) $____ Total Long-Term Liabilities $____ 9 
4 Total Investments $____ TOTAL LIABILITIES $____ 7 
Fixed Assets EQUITY 
Land $____ Total Owner's Equity 
Buildings: $____ at (proprietorship) $____ 
cost, less accumulated or 
depreciation of $____ (Name's) Equity $____ 
Net book value $____ (Name's) Equity $____ 
Equipment: $____ at (partnership) 
cost, less accumulated Total Partners' Equity $____ 10 
depreciation of $ or 
Net book value $____ Shareholders' Equity 
Furniture/Fixtures: $____ at (corporation) 
cost, less accumulated Capital stock $____ 
depreciation of $____ Capital paid-in in excess 
Net book value $____ of par $____ 
Autos/Trucks: $____ at Retained earnings $____ 
cost, less accumulated Total Shareholders' Equity $____ 
depreciation of $____ TOTAL LIABILITIES 
Net book value $____ AND EQUITY $____ 11 
5 Total Net Fixed Assets $____ RECONCILEMENT OF EQUITY 
Other Assets As of (current date) 
(detailed list) $____ Equity at beginning of period $____ 
6 Total Other Assets $____ Plus: Net income (or Minus: 
2 TOTAL ASSETS $____ Net loss) after taxes $____ 
Plus: Additional capital 
contributions 
(investments by owner(s) 
or stock purchases by 
shareholders $____ 
Less: Total deductions 
(withdrawals by owner(s) or 
dividends to shareholders) $____ 
Equality as shown on current 
Balance sheet $____ 12

APPENDIX B1

1.Heading -- The legal name of the business, the type of statement, and the day, month, and year.
Must be shown at the top of the report.

2.Assets -- Anything of value that is owned or legally due the business. Total assets include all net realizable and net book (also net carrying) values. Net realizable and net book values are amounts derived by subtracting any estimated allowances for doubtful accounts, depreciation, and reductions of future service -- such as amortization of a premium during the term of an insurance policy -- from the acquisition price of assets.

3.Current Assets -- Cash and resources that can be converted into cash within 12 months of the date of the Balance Sheet (or during one established cycle of operations). Besides cash (money on hand and demand deposits in the bank, e.g., checking accounts and regular savings accounts), resources include:

• Accounts Receivable -- The amounts due from customers in payment for merchandise or services.
• Inventory -- Includes raw materials on hand, work in process, and all finished goods either manufactured or purchased for resale.
• Temporary Investments -- Interest- or dividend-yielding holdings expected to be converted into cash within a year. Also called marketable securities or short-term investments, they include stocks and bonds, certificates of deposit, and time deposit savings accounts. List on the Balance Sheet at either their cost or market value, whichever is less.

5. Fixed Assets -- Fixed assets, frequently called plant and equipment, are the resources a business owns or acquires for use in operations and does not intend for resale. Land is listed at its original purchase price, with no allowance for appreciation or depreciation. Other fixed assets are listed at cost, less depreciation. Fixed assets may be leased. Depending on the leasing arrangement, both the value and the liability of the leased property may need to be listed on the Balance Sheet.

6. Other Assets -- Resources not listed with any of the above assets. Examples include tangibles such as outdated equipment salable to the scrap yard, and intangibles such as trademarks.

7. Liabilities -- All monetary obligations of a business and all claims creditors have on its assets.

8. Current Liabilities -- All debts and obligations payable within 12 months or within one cycle of operations. Typically they are:

• Accounts Payable -- Amounts owed to suppliers for goods and services purchased in connection with business operations. Short-Term Notes -- The balance of principal due to pay off short-term debt for borrowed funds.
• Current Portion of Long-Term Notes -- Current amount due of total balance on notes whose terms exceed 12 months. Interest Payable -- Any accrued fees due for use of both short- and long-term borrowed capital and credit extended to the business. Taxes Payable -- Amounts estimated by an accountant to have been incurred during the accounting period.

10. Equity -- Also called net worth. Equity is the claim of the owner(s) on the assets of the business. In a proprietorship or partnership, equity is each owner's original investment plus any earnings after withdrawals.

In a corporation, the owners are the shareholders. The corporation's equity is the sum of contributions plus earnings retained after paying dividends.

11. Total Liabilities and Equity -- The sum of these two amounts must always match that for Total Assets.

12. Reconcilement of Equity -- Used for proprietorships and partnerships, this report reconciles the equity shown on the current Balance Sheet. It records equity at the beginning of the accounting period and details additions to or subtractions from this amount made during the period. Typically, additions and subtractions are net income or loss and owner contributions and/or deductions.

For corporations, the same type of report is called the Statement of Retained Earnings. It lists increases or decreases in this accumulated net income since the beginning of the current period.

APPENDIX C

MONTHLY CASH FLOW PROJECTION

APPENDIX C1

2.CASH RECEIPTS (a) Cash Sales. . . . . . . . . All cash sales. Omit credit sales unless cash is actually received (b) Collections from Credit . . Amount to be expected from all credit Accounts accounts (c) Loan or other cash. . . . . Indicate here all cash injections not injection shown in 2(a) or 2(b) above. See "A" of "Analysis"

3.TOTAL CASH RECEIPTS . . . . . . Self explanatory (2a+2b+2c=)

4.TOTAL CASH AVAILABLE. . . . . . Self explanatory (Before cash out)(1+)

5.CASH PAID OUT (a) Purchases (Merchandise) . . Merchandise for resale or for use in product (paid for in current month) (b) Gross wages (excludes . . . Base pay plus overtime (if any) withdrawals) (c) Payroll expenses. . . . . . Include paid vacations, paid sick leave, (Taxes, etc.) health insurance, unemployment insurance etc. (this might be 10 to 45% of 5(b)) (d) Outside services. . . . . . This could include outside labor and/or material for specialized or overflow work, including subcontracting (e) Supplies (Office and. . . .

Items purchased for use in the business operating) (not for resale) (f) Repairs and Maintenance . . Include periodic large expenditures such as painting or decorating (g) Advertising . . . . . . . . This amount should be adequate to maintain sales volume--include telephone book yellow page cost (h) Car, Delivery, and Travel .

If personal car is used, charge in this column--including parking (i) Accounting and legal. . . . Outside services, including for example, bookkeeping (j) Rent. . . . . . . . . . . . Real estate only (See 5(p) for other rentals) (k) Telephone . . . . . . . . . Self explanatory (l) Utilities . . . . . . . . . Water, heat, light and/or power (m) Insurance . . . . . . . . . Coverages on business property and products e.g. fire, liability; also workman's compensation, fidelity, etc. Exclude "executive" life (include in "5W"). (n) Taxes (Real estate, etc.) . Plus inventory tax-sales tax-excise tax if applicable (o) Interest. . . . . . . . . . Remember to add interest on loan as it is injected (See 5(p) for other rentals) (p) Other Expenses (Specify . . Unexpected expenditures may be included each) here as a safety factor

Equipment expensed during the month should be included here (Non-capital equipment) When equipment is rented or leased record payments here (q) Miscellaneous . . . . . . . Small expenditures for which separate (Unspecified) accounts would not be practical (r) Subtotal. . . . . . . . . . This subtotal indicates cash out for operating costs (s) Loan Principal Payment. . . Include payment on all loans, including vehicle and equipment purchases on time payment (t) Capital Purchases . . . . . Non-expensed (depreciable) expenditures (Specify) such as equipment, building, vehicle purchases, and leasehold improvements (u) Other Start-up Costs. . . . Expense incurred prior to first month projection and paid for after the "start-up" position (v) Reserve and/or Escrow . . .

Example: insurance, tax, or equipment (Specify) escrow to reduce impact of late periodic payments (w) Owner's Withdrawal. . . . . Should include payment for such things as owner's income tax, social security, health insurance, "executive" life insurance premiums, etc.

6.TOTAL CASH PAID OUT . . . . . . Self-explanatory (Total 5a thru 5w)

7.CASH POSITION . . . . . . . . . Enter this amount in (1) Cash on Hand (End of month)(4-6) following month--See "A" of "Analysis"

ESSENTIAL OPERATING DATA

A. Sales Volume (Dollars). . . . . This is a very important figure and should be estimated carefully, taking into account size of facility and employee output as well as realistic anticipated sales (Actual sales performed--not orders received)

B. Accounts Receivable . . . . . . Previous unpaid credit sales plus current (End of Month) month's credit sales, less amounts received current month (deduct "C" below)

C. Bad Debt (End of Month) . . . . Bad debts should be subtracted from (B) in the month anticipated

D. Inventory on Hand. . . . . Last month's inventory plus merchandise (End of Month) received and/or manufactured current month minus amount sold current month

E. Accounts Payable. . . . . . . . Previous month's payable plus current (End of Months) month's payable minus amount paid during month

F. Depreciation. . . . . . . . . . Established by your accountant, or value of all your equipment divided by useful life (in months) as allowed by Internal Revenue Service