Accounting 101 for Entrepreneurs - Denver Startup Week 2014
•
3 likes•1,221 views
This document provides an overview of accounting and financial statements for startup founders. It discusses key financial concepts like the income statement, balance sheet, statement of cash flows, forecasting, working capital, capex, and valuation. The presentation emphasizes that accurate financial planning and understanding accounting fundamentals are important for CEOs to effectively manage operations, finance, planning, and marketing. It also provides recommendations on choosing accounting software to track a startup's financials.
More Related Content
What's hot
What's hot (20)
Viewers also liked
Viewers also liked (13)
Similar to Accounting 101 for Entrepreneurs - Denver Startup Week 2014
Similar to Accounting 101 for Entrepreneurs - Denver Startup Week 2014 (20)
Recently uploaded
Recently uploaded (20)
Accounting 101 for Entrepreneurs - Denver Startup Week 2014
- 1. Accounting and Financial Statements 101 For everyone but bean counters (especially rogue startup badasses) Peter Kos @peterkosjr linkedin.com/in/peterkosjr ! ! #DENStartupWeek 1
- 2. 2
- 4. Discussion • Financial Statements • Forecasting, Business Planning & Cash Flow • Capex and Depreciation • Accounting Software and Charts of Accounts • Other considerations • Valuation and cost of capital 4
- 5. Broad Arcs • You as the CEO are where Finance, Operations, Planning/Forecasting, and Marketing converge • All business plans are always wrong. Per io d! • Have some idea of your exit before hiring a CFO • Be candid about your skills in these areas • Plan top-down and bottom-up • It’s about execution, not an idea - focus on the hard stuff
- 6. Financial Statements • Income Statement • Balance Sheet • Statement of Cash Flows • Statement of Shareholder’s Equity 6
- 7. 7
- 8. 8
- 9. Balance Sheet September 30, 2014 9
- 10. Balance Sheet September 30, 2014 10
- 11. Chart of Accounts • Income Statement Accounts • Balance Sheet Accounts • Trial Balance 11
- 12. Working Capital Current Assets - Current Liabilities Current: within 12 months (Is this accessible money?) 12
- 13. Working Capital Current Assets - Current Liabilities Inventory Tax Payments Payable Accounts Receivable Accounts Payable Note Receivable Note Payable Cash !
- 14. Cash Flow Statement 14
- 15. Real Cash Flow Statement
- 16. Forecasting • All forecasts are always wrong • Tests fundamental assumptions about the business model • Consider your revenue model - if you are buying every customer, you’re dead • Balance Sheet Forecasts essential, but painful 16
- 17. Breakeven Analysis • The break-even number is less important than the “minimum viable business” • Manufacturing business often think in terms of “cost plus” and then attempt to minimize costs / improve margin • Cost base (fixed costs) divided by gross margin = break-even sales • Caution: this is not = cash flow positive 17
- 18. Capex Capex = Capital Expenditure = Fixed Asset Depreciation = Cost of fixed asset / life expectancy Depreciation Expense = not a cash outlay Makerbot Replicator Cost $2,950 Life Expectancy (Useful Life) in Months 36 Monthly Depreciation Expense 81.94
- 19. Capex Risk / Return Cost: $10,000 Profit: 2,500 yearly Cost: $5,000 Profit: $1,250 yearly Cost: $5,000 Profit: $1,250 yearly 19
- 20. Debt vs. Equity The cost of capital $ $$$$ Debt Equity 20
- 21. Read this book before looking for equity money: Venture Capital Private Equity ESOPs
- 22. Valuation 22
- 23. Pitfalls • Don’t plan “downhill, with a tailwind” • Growth is rarely exponential or even linear after the “honeymoon” • Beware step costs • Manufacturing, service, software, and distribution businesses all have different growth drivers • Selling more to your customers vs selling to more customers • Plan for availability of capital before you need it • Factoring = Bad 23
- 24. A/B testing CPM Churn COA Ratios Competitive Moat Conversion Rate Sales Pipeline Channel KPIs 24
- 25. Accounting Software • Xero • Zoho Books • Freshbooks.com • Account Edge • Quickbooks • Peachtree / Sage • Less Accounting • Intaact, NetSuite, etc. 25
- 26. A Shameless Plug Come spend the weekend with me ! No, I didn’t mean it that way ! Well, ok…if you really want to ! @peterkosjr pkos@netpositiveco.org 26
- 27. Thanks Swiftpage ! slideshare.net/PeterKosJr/acct101denstartupweek2014 ! ! @peterkosjr ! linkedin.com/in/peterkosjr ! peterkosjr@gmail.com ! ! 27