SCORE client USA Gypsum saw the benefit of focusing on its financial plans.
Together with his mentor Lou Davenport, company President and General Manager Terry Weaver developed financial projections and organized the business’ balance sheet before approaching banks.
After reviewing his strong reports, every bank Weaver approached approved the company’s request for a line of credit.
“By pointing out things in the financial statements that I needed to focus on, such as honing in on my gross profit and cost of goods sold, he showed me how to improve the bottom line,” Weaver said.
In some cases, they may find the thought of creating a financial plan intimidating.
Below you’ll find guidelines to help you focus your financial planning efforts, which will make the process less daunting.As this information has been prepared without considering your objectives, financial situation or needs, you should, before acting on the information, consider its appropriateness to your circumstances.No matter how solid your business idea may be, it’s hard to predict revenue and expenses from the get-go.Things to consider are: This article is intended to provide general information of an educational nature only.It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.Research and list all the items you need to start your business to get a good idea of upfront costs and whether you’ll need to borrow funds.Here are some examples of costs that typically come up at the start: Estimate your sales and expenses on a monthly, quarterly or yearly basis to gauge whether you can expect to make a profit or loss for each of these periods.There’s no one magic number that will make or break your financial plan.Rather, it’s a mix of figures that come together to give you a bigger picture of your business progress. Start by analyzing the following: As you begin to review your finances and plan for the future, be sure to talk with your business partners or trusted advisors like a SCORE mentor.The break-even point can be useful for analysing the sales, costs and pricing numbers used in your earlier forecasts and judging whether your business idea is feasible.For example, if your break-even point is years away, you may want to revisit your numbers to see if there are any opportunities to make your business more profitable.