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1. SESSION TWO (2)
FINANCIAL MANAGEMENT & BUSINESS PLAN
Presentation By
EMMANUEL KARABA

2. FINANCIAL MANAGEMENT & BUSINESS PLAN
Contents
1. Financial Management
1.1 Definition of Finance and Financial Management
1.2 Importance of Financial Management
1.3 Sources of Business Finance
1.4 Business records and the types
1.5 Preparation of books of Account ( Profit & Loss A/c, and financial statement)
2. Business Plan
2.1 Definition of Business Plan
2.2 Reasons for preparing a Business Plan
2.3 Major Components of a Business Plan
2.4 Preparation of a Business plan

3. Objectives of this training
By the end of this session, participants should be able to; -
1. understand the concept of finance and financial management.
2. understand the importance of financial management.
3. draw profit & loss a/c, and financial statement for their businesses.
4. understand the importance of a Business Plan and it’s components.

4. FINANCIAL MANAGEMENT
Finance: the management of money other assets.
Financial management: refers to general financial principles such as planning,
organizing, directing and controlling the financial activities such as procurement and
utilization funds of the entity
Financial management cycle 1
2
4
3
Planning and
budgeting
Operation and
monitoring
Evaluation
and
reporting

5. Importance of financial management
 Financial planning
 Safeguarding funds
 Improve profitability
 Acquisition of fund
 Tax planning
 Capital reserve
 Investment decision
 Valuation of business
 Dividend decision
 Allocation of fund

6. Sources of business finance
1. Debt financing : require borrowing system and the entrepreneur is bound to pay back the
fund together with interest payable.
2. Equity financing : it doesn’t require collateral and offers the investor some form of
ownership position in the business. Equity is the total sum of the business ordinary shares plus
the retained earnings also known as revenue reserved.
3. Internal financing : funds are generated from several sources within the company. For
example; profits sale of assets, reduction in the working capital receivable retained profits.
4. External financing : this may come from family members, credit suppliers, government
programs, grants etc.

7. BUSINESS RECORDS AND THE TYPES
Business record: refers to information created, received, and maintained as evidence
for the business activities done.
Types of business records
Business records includes the following; -
Accounting records; include all transactions made
Bank statement; all the business details with the bank
Legal documents; what your business is and how its structured.
Insurance documents; in case you want to use one
Permits and licenses; authorization documents

8. Production cost; refers to the cost in the process of producing a good or service. It includes the
material costs and other expenses.
Example of production cost (Chapati business)
S/N ITEM QUANTITY UNIT PRICE AMOUNT
1 Rent and wages 1 6,000
2 Woven 1 7,000
3 Frying pan 1 5,000
4 saucepan 1 6,000
5 Basin 2 10,000
6 Plates 6 3,000
7 Baking flour 20kg 52,000
8 Baking powder 5kg 13,000
9 Cooking oil 26 liters 26,000
10 Table 2 20,000
11 Chairs 6 24,000
Charcoal 1 sack 7,000
Beans 30kg 24,000

9. BOOKS OF ACCOUNT (Profits & Loss a/c, and Financial Statement) example of Chapati business
PROFITS AND LOSS ACCOUNTS FOR THE YEAR 2023
Month 1 2 3 4 5 6
Sales 208,000 228,800
Direct material cost 122,000 134,200
Direct Labour cost 78,000 78,000
Total direct cost 200,000 212,200
Gross profits 8,000 16,000
Other indirect cost 6,000 6,000
Indirect Labour cost
Total indirect cost 6,000 6,000
Net profits 2,000 10,600

10. FINANCIAL STATEMENT FOR THE MONTH OF JANUARY 2023
Date Particular (item) Debt Credit Balance
1/1/2023 Balance c/f 120,000 120,000
3/1/2023 Sales 40,000 160,000
4/1/2023 Purchase of Azam 52,000 108,000

11. BUSINESS PLAN
Business Plan: refers to a document that convincingly demonstrate that your business
idea can sell enough of its products and services to make satisfactory profits and
attractable potential financiers.
Why prepare a business plan
 It defines and focus business objectives and goals
 To clearly communicate your vision/ideas to others within and outside
 To avoid silly mistakes
 As a tool for fundraising, marketing, monitoring, evaluation, and staffing
 To be realistic on our intentions

12. Components of a Business plan
1. Executive summary; it includes: -
1. Type of venture
2. Product/service to be offered
3. How unique
4. Is there any opportunity for products/service
1. Executive summary
2. Business description
3. Marketing plan
4. Competitors’ analysis
5. Management and Organization
6. Business operation
7. Financial plan
8. Appendix

13. 5. The business status/stage
6. Legal form of business
7. Location of business
8. Target market
9. Percentage share of market
10. Competitors’ strengths and weaknesses
11. Strategy of entering the market
12. Managing staffs and their qualifications and experiences
13. Time frame for accomplishing your goals
14. How much money needed for starting and running the business
15. Type of financing you are seeking
#. Loan
#. Grand
16. Strengths that will make the business succeed
17. Future plans for the business

14. 2. Business description
1. Objectives, vision, mission statement and goals
2. Specific objectives (SMART)
a) service objective (quality of products/services)
b) profit objective ( actual % and amount targeted)
c) growth objective
d) social objectives (corporate responsibility)
3. Type/form of business venture
4. Date of commencement
5. Physical location
6. Advantages of the location
7. Postal address, physical address/street/building/road
8. Contact details: Telephone contact, email, website if any
9. Brief history of the business (company)
10. Experience of the owner(s)

15. 3. Marketing plan
1. Description of the target market (customer segment)
2. Description of products/services
3. Price(s) of products/services
4. Distribution of products/services
5. Promotion of products/services
4. Competitors’ analysis
1. In ternal analysis both strengths and weakness
2. External analysis (opportunities and threats)
3. Environmental analysis (political, social, economic, regulatory factors that can affect
your business

16. 5. Management and organization
1. Key management staff(s)
a) their position/designations and responsibilities
b) qualification and experience
2. Other staff(s); their position , responsibilities, qualification, and number
3. Human resource practices
a) staff recruitment
b) motivation
c) training and development
d) reward and recognition
e) staff appraisal

17. 6. Business operation
1. Product/service development design
2. Description of premises
3. Ownership status
4. Products and services to be offered
5. Machinery, tools, equipment and other facilities required
6. Implementation
a) procurement
b) repair and maintenance
c) future expansion
7. Legal requirements: Business name, tax compliance, Labour laws, by-laws etc.
8. Monthly overhead expenses
9. Professional and support services

18. 7. Financial plan
1. Preoperational costs (costs before start up)
2. Working capital (actual cash for running the business)
3. Projected monthly cash flow statement
4. Projected annual cash flow statement
5. Projected balance sheet
8. Appendix
1 Brochures and advertisement materials
2 Map and photos location
3 Copies of lease and contracts
4 Company certification of registration
5 List of assets available
6 Copies of licenses
7 Research and marketing results

19. 8 Any other material needed to support your business plan

20. ANY QUESTION(S)

21. “Success is not by chance but through
struggle”
and
“Remember, Practice Makes Perfect”
THANK YOU
BASIC ENTREPRENEURSHIP SKILLS 2023

22. CONTACT INFORMATION:
Name: Emmanuel Karaba
Title: Economist and Entrepreneur
Email: emmanuelkaraba1998@gmail.com
WhatsApp: +211922209666
Feel free to contact the above details for any inquiry or help