Managing forest businesses requires attention to revenue, costs, and financial management. Forests grow naturally but only provide good profits if well managed to protect trees from risks. A forest management plan should set long-term objectives and specific measures for protection, inventory, yield, harvesting, and monitoring to achieve objectives. Financial management of forest businesses requires tracking sales, costs, operating income, and net income over time to evaluate performance and returns.

1. “Managing Successful Forest Business-
Revenue , Cost and Financial Management.”
Prepared By: Vivek Chauhan (16091)

2. “Forests grow of their own accord, but they
only provide good profits if they are well
managed. At its best, forest management
protects trees from environmental and market
risks.”

3. What is a Business?
"any activity or enterprise entered into for
profit. It does not mean it is a company, a
corporation, partnership, or have any such
formal organization, but it can range from a
street peddler to General Motors."

4. Factors involved in Managing Business:
1. Sales
• The single-most important factor to keeping your restaurant open.
• Based on your menu and estimated daily volume of customers, you should
be able to calculate how much your restaurant will bring in. Of course, you
want to update this when the real figures arrive.
• As time goes on, make sure you track these numbers and compare them
to the same period of the prior year, too. You want to get a sense for when
your downtimes are in the year and when you see the most sales.
• Likewise, keep a running tally of average customer counts and check size,
so you can adjust your prices if necessary.
2. Prime Cost
• Your prime cost covers the total cost of your sales . These include:
Benefits
Payroll taxes
Wages
Workers compensation
• There may also be some expenses unique to your operation.

5. Conti…
3. Operating Income
• You may also hear this referred to as your restaurant’s “controllable income”. This
number encompasses those expenses that management have control over.
• That makes this a very important number because it serves as a reliable
benchmark for assessing how effective management is
4. Net Income
• After you’ve paid all of your restaurant’s expenses, you will be left with your net
income.
• The reason this number is important probably doesn’t mean much of an
explanation.
• You should also compare your net income with the total amount you invested into
your restaurant. This will give you your ROI (Return on Investment). In short, that
will tell you if you’re making your money back and is an extremely important
metric if you hope to entice investors into future restaurants.

6. Management plan
A forest management plan should include basic information that is directly relevant to
forest management.
It should state long-term management objectives and set out specific prescriptions
and measures – in relation to protection, inventory, yield determination, harvesting,
silviculture, monitoring and other forest operations – for achieving those objectives.
The forest management plan should specify:
• the maximum area from which forest produce may be harvested,
• or the maximum quantity of forest produce that may be harvested, or both, in a
given period;
• the infrastructure needed according to the harvesting plan,
• local conditions and other relevant factors;
• the forest protection measures to be carried out;
• the forest development operations, including silviculture, to be carried out;
• and other matters that are necessary to achieve management objectives, such as
forest inventory, mapping, technical and social surveys, monitoring, projections
and public consultation.

7. Importance of Forest Management
Planning
• help forest owners and managers identify what they want from the forest
and provide an efficient course of action to meet those objectives;
• provide a means by which stakeholders can participate in forest
management and ensure clarity on the roles and responsibilities of the
various stakeholders;
• ensure the existence and functionality of the resource while also
increasing its value (e.g. specifying where, how and under what conditions
and constraints the resource may be used);
• save time and reduce costs (e.g. in road construction and wood
harvesting);
• reduce risks and their impacts and avoid potentially costly forest
management mistakes (e.g. harvesting the wrong trees or at the wrong
time, failing to implement fire management, or neglecting an insect
infestation);
• project future harvesting volumes and earnings;
• and assist in the efficient collection of information and the organization of
business records.

8. Forest inventory:
“A forest inventory collects information on wood
and non-wood forest resources, site
classification, social aspects and biodiversity. Full
inventories at the FMU level may be carried out
periodically, and data should be integrated with
geographic information systems to the greatest
extent possible. Among other things, data from
FMU inventories are typically used to estimate
the annual allowable harvest of wood and non-
wood products.”

9. • Yield prediction
Growth and yield predictions require high-quality data on tree growth,
which are best obtained through the careful design and
remeasurement, over time, of permanent sample plots. Growth and
yield predictions and other ecological information should be compiled.
Collaborative research can be a cost-effective means of obtaining data.
FAO (1998) outlines the basic steps involved in the construction of
yield prediction models.
• Yield control
The division of the FMU into blocks or compartments and the defining
of annual cutting areas and volumes are essential for the practical
control of harvesting. Once the limit has been reached, the block or
compartment should be closed off and no more harvesting carried out
until the next felling cycle (as specified in the forest management
plan). Premature re-entry to harvested blocks should be avoided.
Records of production levels of wood and non-wood products must be
maintained for each harvested compartment or block and reconciled
against predicted yields to ensure that the limit is not being exceeded.
This information is also essential for predicting future growth and yield
and for the accurate revision of yield levels, and it helps provide
management continuity over time.

10. Preliminary assessments
Preliminary assessments should be carried out at the onset of the
forest management planning process. Such assessments assist decision
making and help ensure the economic, social and environmental
sustainability of the forest management plan.
They may include:
• clarification of tenure;
• analysis of the legal status of the land;
• data collection on the biophysical (e.g. climate, topography and
hydrology) and socioeconomic environments (e.g. demography,
living conditions and local government);
• analysis of market opportunities for forest goods and services;
• analysis of other economic factors affecting forest management;
• social surveys (e.g. using rural appraisal methods);
• analysis of management scenarios based on inventory data in
accordance with national and subnational laws, policies, strategies
and plans; and cost–benefit analyses of options.

11. Balance sheet :
“A balance sheet is a financial statement that
reports a company's assets, liabilities and
shareholders' equity at a specific point in time,
and provides a basis for computing rates of
return and evaluating its capital structure.”

12. Project Cost and Revenue Planning
It provides business service firms with a flexible project-centric planning application to
satisfy the planning and forecasting of projects.
Project cost and revenue planning is a fundamental activity conducted in order to plan
and monitor the delivery of projects to the client and the customer. The actual
planning process and the subsequent monitoring can vary greatly depending on the
type of business and the phase of the project. However, the following process is
common across business scenarios:
• Type of planning (for example, budget, costs) that involves the identification of
various resources (time and materials) and other expenses required to deliver the
project and planning for the associated revenue that can be realized or billed.
• Creation of additional planning information and planning assumptions
• Monitoring of planned versus actual values
• Forecasting and plan adjustments, where variations or versions of the project
plans are created for re-forecasting or estimate to completion processes. Typically,
this is a routine activity during the project execution phase.
• Variations in the planning approach can include whether the project is planned at
the overall level or analyzed by period (for example, monthly), and whether the
project is planned by some form of breakdown.

13. Conti…
Planning is an inevitable and critical business
activity. Project Cost and Revenue Planning provides an
integrated application that supports all aspects of project
planning through:
• A unified financial planning application for all aspects
such as resources, materials, expenses, and third-party
planning
• An environment for bids, proposals, estimates,and
revenue plans.
• Abilities for forecasting such as estimate to complete
(ETC) or estimate at completion (EAC).
• Real-time monitoring and control.

14. Cost Estimation
• Labor: The cost of human effort expended towards project
objectives.
• Materials: The cost of resources needed to create products.
• Equipment: The cost of buying and maintaining equipment used in
project work.
• Services: The cost of external work that a company seeks for any
given project (vendors, contractors, etc.).
• Software: Non-physical computer resources.
• Hardware: Physical computer resources.
• Facilities: The cost of renting or using specialized equipment,
services, or locations.
• Contingency costs: Costs added to the project budget to address
specific risks.

15. Revenue Estimation
1. Start with expenses, not revenues. When you're in the
startup stage, it's much easier to forecast expenses than
revenues. So start with estimates for the most common
categories of expenses as follows:
• Rent
• Utility bills
• Phone bills/communication costs
• Accounting/bookkeeping
• Legal/insurance/licensing fees
• Postage
• Technology
• Advertising & marketing
• Salaries

16. Conti…
Here are some rules of thumb you should follow
when forecasting expenses:
• Double your estimates for advertising and
marketing costs since they always escalate
beyond expectations.
• Triple your estimates for legal, insurance and
licensing fees since they're very hard to
predict without experience and almost always
exceed expectations.

17. Conti…
2. Forecast revenues using both a conservative case and
an aggressive case.
If you're like most entrepreneurs, you'll constantly
fluctuate between conservative reality and an aggressive
dream state which keeps you motivated and helps you
inspire others. This is called this dream state "audacious
optimism."
Rather than ignoring the audacious optimism and
creating forecasts based purely on conservative thinking, I
recommend that you embrace your dreams and build at
least one set of projections with aggressive assumptions.
You won't become big unless you think big! By building
two sets of revenue projections (one aggressive, one
conservative), you'll force yourself to make conservative
assumptions and then relax some of these assumptions
for your aggressive case.

18. Conti…
The best way to reconcile revenue and expense projections is by a series of
reality checks for key ratios. Here are a few ratios that should help guide your
thinking:
• Gross margin. What's the ratio of total costs to total revenue during a
given quarter or given year? This is one of the areas in which aggressive
assumptions typically become too unrealistic.
• Operating profit margin. What's the ratio of total operating costs-to total
revenue during a given quarter or given year? You should expect positive
movement with this ratio. As revenues grow, overhead costs should
represent a small proportion of total costs and your operating profit margin
should improve.
• Total headcount per client. If you're a one-man-army entrepreneur who
plans to grow the business on your own, pay special attention to this ratio.
Divide the number of employees at your company--just one if you're a jack-
of-all-trades--by the total number of clients you have. Ask yourself if you'll
want to be managing that many accounts in five years when the business
has grown. If not, you'll need to revisit your assumptions about revenue or
payroll expenses or both.

19. Thank you..!