A lot of variable can change in five years and it is

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A lot of variable can change in five years and it is hard to be accurateExample:Soccer is expanding long-termNFL,NBA, MLB are looking to go over seas becausethey tapped out in the U.SCollege football long-term
Cable description are downStudent attendance is downoThis is scary for the futureoWe need to develop a financial Plan this is called a Pro Forma BudgetPro Forma BudgetoA pro forma budget is simply a future budget based on past financialresults and expected future financial results.oIt contains a financial plan for the business.The two are often combined to help complete the business plan.oTypical extensive pro forma budgets might incorporate the following:A sales budgetA promotion budgetA materials, labor, and overhead budgetA cash budgetA capital appreciation budgetEvery year will be a little less accurateFinancial Plan in Five Steps1.Develop a system of projected financial statements, which can help a companyanalyze how the operating plan will affect the projected profits.2.Determine the funds that will be needed to help fund the long-term plans.3.Forecast what funds will be available over the long term and how much of thefunding will be generated internally and externally.4.Establish and maintain a system of controls governing how funds are allocatedand used.5.Examine the results and develop procedures for adjusting the plan if theforecasts are not met.
The more information you put into the plan the more information they have and the lessquestions they will ask. These are like resumes!Business PlanoThe plan summary should be written after all other sections are finished. It describesthe following:The purpose of your planThe product or service that you will sell and why it is uniqueSecond- or third-generation products or services to help maintain salesThe market potentialSpecific highlights in the marketing planThe skills provided by the management teamThe financial projections for the first several yearsYour funding needsAn exit strategy if the business does not succeedWhy? If this does not go well will the investor get money back?oSpecial CircumstancesFor example, what stock purchase options exist if the company goes public?Do key employees have noncompete contracts?Any data an investor would need to make an investment decision should beincluded.oAnalysis of the Product or ServicesInclude a thorough analysis of the product’s or service’s unique qualities,which will help distinguish the product or service from those offered bycompetitors.The plan should identify any ancillary products or services that also might beproduced to develop a more significant product or service line.

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Term
Spring
Professor
JohnHandcock
Tags
Balance Sheet, Revenue, Financial Ratio, Generally Accepted Accounting Principles

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