Be sure to complete the spreadsheets and budgets in order, from left to right, when viewing the tabs at the bottom of the spreadsheets. By following this order of completion, data from the earlier spreadsheets will move forward to the appropriate subsequent spreadsheets and financial forms.

The order of completion should be:

Monthly Marketing Budgets
Monthly Sales Budgets
Monthly Staffing Budgets
Monthly Income Statements
Start-up Costs
Sources and Uses of Funds
You do not have to complete any of the Quarterly Forms or the Assumptions Table as these should automatically populate as you enter your data. 

Be sure to follow the step-by-step instructions from the ‘Financial Spreadsheet Packages Instructions’ document provided in the Business Plan Development class. A copy is provided as a separate document.

Both the class material as well as the book can be a good resource for clarification and additional information. Be sure to also contact your instructors if you have questions.

Working Capital and The Cash Reserve

Here is some more information in regards to Working Capital and the Cash Reserve

Working Capital

Working Capital (Technically it is called Net Working Capital but most everyone just calls it Working Capital) is the money that a business has available for day-to-day operations, Many businesses operate at a shortfall in this area in their early months of operations. In other words, the business spends more than it brings in.

Example:      Jan              Feb              March

Revenues      $2,000        $5,000        $9,000

Expenses    $10,000      $10,000      $10,000

Shortfall        $8,000        $5,000        $1,000

This business has a total shortfall of $14,000 for these three months and would need to have cash available to cover this.

Working Capital requirements are automatically calculated on your spreadsheets so you don’t have to do calculations here.

In regards to what number to enter on the Start-up Costs page for Three Year Working Capital, just look on the three year Monthly Income Statements spreadsheet for the largest negative number for any one month on the Summation of Cash Flows line and enter that or the summation of the first two month’s in year one total expenses, whichever is larger. When entering on the Start-up Costs page, be sure to enter this as a positive number.

The Cash Reserve

The Cash Reserve is money that is kept available for unexpected events. A common issue might be some weather related issue where the company is unable to operate for a couple of weeks but still must meet payroll etc.

For a new business, it is generally recommended that the Cash Reserve be about 1/2 of the total start-up costs. The Cash Reserve is at the bottom of the Sources and Uses of Funds Statement. The key here is to take a look at your Start-up costs from the Start-up costs spreadsheet and then go to the Sources and Uses of Funds statement and increase the amount of money required at the top until the Cash Reserve is large enough. Once you increase the Funds Required, the Cash Reserve will automatically calculate.

Keys to Success

Be sure that the numbers are realistic, particularly the sales numbers. One of the main reasons that investors do not finance a business is that they don’t believe the sales numbers. This is also a major reason as to why many businesses fail. Companies take on too many expenses with the assumption that the sales will be there to cover them and when the sales do not reach the anticipated numbers, or perhaps not as quickly, the expenses cannot be covered and the company becomes insolvent and goes out of business.

Many businesses have a start-up time period before they begin to generate sales so be sure to allow for this if it applies to your particular situation.

Be sure that the numbers are consistent. If you make mention of a particular number in the body of your business plan paper, make sure it matches the spreadsheets.

Be sure to really get a good grasp on your numbers as it will be easier to defend them while answering investor questions during a presentation.

Evaluation Sheet

Here is the evaluation sheet that will be used:

Each of the following four sections is worth 25 points each.

A  Superior – 22 to 25 points

B  Above Average – 18 to 21 points

C  Average – 14 to 17 points

D/F Below Average/Failing – 0 to 13 points

The Income Statement                                                                             

Are all sections completed? Are the numbers consistent? Are the projections realistic?

Start-up Costs                                                                                         

Are all sections completed? Are the numbers consistent? Are the projections realistic?

Sources and Uses of Funds Statement                                     

Are all sections completed? Are the numbers consistent? Are the projections realistic?

Overall Layout                                                                                               

Do the financial statements contain all the required elements? Are they well-organized and free from grammar and spelling errors.

Late Policy

You will receive a 20% deduction for submitting the assignment one day late, a 50% deduction for submitting the assignment two days late, and no assignment will be accepted for credit after the second day. Any assignment submitted late will receive a flat 5-point GPS deduction.

Academic Integrity Policy

Students may not reuse identical or near-identical work that was submitted for a previous course in the EBMS program, or any prior degrees, unless approved, in writing, by the course director. If the student is repeating this current course due to withdrawal, leave, failure or other circumstance, an exception will be granted: he or she may reuse and resubmit previous material created for this particular course so long as the material is updated and revised to include any prior faculty feedback and corrections. An assignment identified as resubmitted work from a different class will receive a grade of “0” as well as a loss of GPS points.  A second occurrence will be considered Academic Dishonesty and subject to the penalties outlined in the Student Manual. Please refer to your Student Manual for the complete Full Sail Code of Conduct and Standards of Behavior, including the consequences of academic dishonesty. If you have any questions, please contact your instructor or student advisor.