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GoSolo Workshop 4: Looking behind the numbers
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GoSolo Workshop 4: Looking behind the numbers

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At this GoSolo presentation we went through the difference between profit and cash flow and ran through how to develop a budget/forecast for your startup.

At this GoSolo presentation we went through the difference between profit and cash flow and ran through how to develop a budget/forecast for your startup.

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GoSolo Workshop 4: Looking behind the numbers GoSolo Workshop 4: Looking behind the numbers Presentation Transcript

  • looking behind the numbers
  • agenda introduction to tandem and the team what are financial statements? p&l vs. cashflow? budgeting for your business importance of bookkeeping in a startup q & a session with entrepreneur upcoming GoSolo workshops
  • “ tandem strives to nurture innovation, entrepreneurship and SMEs through quality, strategic services” about us startups small business medium business financial consulting startup services business intelligence investment services
  • our services startup services
    • business planning
    • market research
    • financial modeling
    • strategy and business model development
    • business development
    • mentorship, guidance and support
    financial consulting
    • corporate governance
    • financial planning and reporting
    • restructuring and business realignment
    • accounting systems, manuals and processes
    • succession and acquisition planning
    • cfo representation
    business intelligence
    • market research and evaluation
    • data analysis
    • benchmarking
    • innovative practices
    • surveying
    • competitive intelligence
    investment services
    • pitch development
    • investment analysis
    • business valuation
    • fundraising
    • exit planning and execution
    • portfolio and investment monitoring
  • agenda introduction to tandem and the team what are financials? p&l vs. cash flow? budgeting for your business importance of bookkeeping in a startup q & a session with entrepreneur upcoming GoSolo workshops
  • numbers
    • Typically something entrepreneurs are not good at or don’t like
    • Needs to be a fundamental part of your business. Like marketing, sales etc
    • Reduces the chances of business failure. Of the top 10 reasons, 3 are directly related to numbers.
    • CEO / CFO interaction
  • starting up a business
  • what are financials?
    • Financial Statements, Financial Reports, Accounts
    • A set of formal records of the financial activities of a business, person or other entity. The most commonly used statements are:
    • Income Statement (Profit & Loss Statement, P&L): designed to report on a company’s revenues, expenses and profits over a period of time.
    • Statement of Cash Flows (Cash Flow): designed to report on the source and use of cash over a period of time.
    • Balance Sheet: designed to report on a company’s assets and liabilities and ownership equity at a given point in time.
    • Financial Projections, Financial Forecasts
    • A set of Financial Statements that are designed to forecast future performance of a business. These are commonly used to evaluate a business’ future viability.
  • agenda introduction to tandem and the team what are financials? p&l vs. cash flow? budgeting for your business importance of bookkeeping in a startup q & a session with entrepreneur upcoming GoSolo workshops
  • why is a p&l different from a cash flow statement? P&L The P&L is a company’s financial statement that indicates how the revenue (money received from the sale of products and services before expenses are taken out, also known as the "top line") is transformed into the net income (the result after all revenues and expenses have been accounted for, also known as the "bottom line"). Cash Flow The cash flow statement is concerned with the flow of cash in and cash out of the business. The statement captures both the current operating results and the accompanying changes in the Balance Sheet. As an analytical tool, the statement of cash flows is useful in determining the short-term viability of a company, particularly its ability to pay bills.
  • agenda introduction to tandem and the team what are financials? p&l vs. cash flow? budgeting for your business importance of bookkeeping in a startup q & a session with entrepreneur upcoming GoSolo workshops
  • budgeting for your business Capital Expenditure (CAPEX) When a business spends money buying a fixed asset (non-consumable) which will produce future benefit. Operating Expenses (OPEX) When a business spends money on running costs, consumables and day-to-day expenses. Laptop purchased for employee use? Rent for business premises? Office furniture for employee use? Salaries? Laptops for resale? Total investment required in your startup = CAPEX + OPEX for 6 months EXAMPLE
  • your p&l Sales, Revenue, “Top Line” = Price per unit x projected units Cost of Sales, “COGS” = Cost per unit x projected units Operating Expenses “OPEX” Salaries (Basic, Commission, Bonus) Ancillary (Visas, Gratuity, Insurance, Airfare, Housing) Rent Professional Services (Marketing, PR, Legal) Utilities Web Hosting Maintenance Insurance Fuel Salik Licensing Depreciation Operating Profit, “Bottom Line”
  • agenda introduction to tandem and the team what are financials? p&l vs. cash flow? budgeting for your business importance of bookkeeping in a startup q & a session with entrepreneur upcoming GoSolo workshops
  • maintaining your books
    • What is bookkeeping?
    • Typically relegated to the bottom of the to-do list
    • Predicts cash flow troubles
    • Critical to be able to monitor the business’ actual performance vs forecast
    • For analysis purposes (by customer, by product)
    • Essential to make the right business decisions regarding strategy, expansion, cost-cutting etc.
    • Key for obtaining future financing, bank facilities or investment
    • Will become exponentially more difficult with time
    • Some basic accounting software packages start at $200 and require no accounting skills
    • Outsource if you can!
  • agenda introduction to tandem and the team what are financials? p&l vs. cash flow? budgeting for your business importance of bookkeeping in a startup q & a session with entrepreneur upcoming GoSolo workshops
  • wadih haddad
  • agenda introduction to tandem and the team what are financials? p&l vs. cash flow? budgeting for your business importance of bookkeeping in a startup q & a session with entrepreneur upcoming GoSolo workshops
  • upcoming GoSolo workshops
    • wednesday october 13 th 2010
    • fundraising
    • wednesday november 10 th 2010
    • incorporation
    • register at [email_address]