Module Overview:
Being aware of the costs associated with starting, running, and maintaining a business is crucial to the sustainability of the business.
In this Module, you will develop an awareness of the costs incurred when creating and managing a business and of ways to keep up with those costs by using proper accounting methods and systems that are universally accepted. You will also discuss the financial management process and its components, the importance of having the knowledge of money in a business, and an overview of business taxes and how to keep track of them.
Conclusion
In this Module, you reviewed the costs involved in the process of creating and managing a business; the financial management process, including financial statements, forecasts, budgets, and financial ratios; and the impact of business taxes on business and how to keep track of them. You also discussed the financial strategies and the legal issues related to starting and running a business.
In this module’s second assignment, you will develop the third part of a business plan and submit it. In the third part of the business plan, you need to prepare a simplified financial plan for the business initiative being developed in this course.
Module Readings
Complete the following readings early in the module:
- Module overview
- From your course textbook,Entrepreneurship: Starting and operating a small business, read the following chapters:
- Understanding and Managing Start-up, Fixed, and Variable Costs
- Using Financial Statements to Guide A Business
- Cash Flow and Taxes
- Financing Strategy
- Addressing Legal Issues and Managing Risk
- From the Argosy University online library resources, read the following articles:
- Huyghebaert, N., & Van de Gucht, L. M. (2007). The determinants of financial structure: New insights from business start-ups. European Financial Management, 13(1), 101–133. doi:10.1111/j.1468-036X.2006.00287.x
- Phillips, J.J. (2003). ROI best practices. Chief Learning Officer, 2(6), 50–52. Retrieved from http://media.roiinstitute.net/articles/pdf/2007/10/07/ROI_Best_Practices_-_Business_Intelligence.pdf
- Global Risk Alliance Pty Ltd. (2005). Risk management guide for small business. Retrieved from http://www.significanceinternational.com/Portals/0/Documents/2005-sme-risk-management-guide-global-risk-alliance-nsw-dsrd.pdf
- Smith, C.W. (Jan 2007). On governance and agency issues in small firms. Journal of Small Business Management, 45(1), 176–178. ProQuest Document ID: 221003174) Retrieved from http://search.proquest.com.libproxy.edmc.edu/docview/221003174?accountid=34899
Assignment: Business Plan Breakdown 3—The Simplified Financial Plan
Instructions
This is the third milestone of your business plan—the financial plan.
Tasks:
Research the costs, financial statements, cash flow, and risks of your chosen project From Assignment Titled: Business Plan Breakdown 1-The Choice of Business. (This Assignment will be attached as a attachment if needed for references) Based on your research and the knowledge you have gained from the course Titled: The Functional Contribution to Organizational Success, Master of Science in Organizational Leadership [MS_OL], create a simplified 4- to 5-page financial plan including tables and charts. For the financial plan:
- Estimate the capital requirements, use of capital, start-up requirements (if applicable), and other probable costs involved in the implementation and subsequent operation of your project.
- Identify the sources of financing.
- Define a payback period.
- Prepare cash flow projections.
- Prepare a projected balance sheet representing the end of the first calendar year of operations and defining assets and liabilities, both current and long term.
- Prepare income statement projections for the end of the first calendar year of operations, including charts showing gross revenues, gross profit, and net income.
- Define the meaning of a break-even analysis and prepare an analysis appropriate for your project.
- Prepare a ratio analysis, including the definition and value of the following ratios (whichever applicable)—current, quick, debt, debt-to-equity, average inventory turnover, receivables turnover, payables turnover, net sales to working capital, net profit to sales, and net profit to equity.
- Prepare a list of possible risks associated with the implementation and future operation of your project and describe the significance of each of them.
Submission Details:
- By Monday January 14, 2019, save your paper and submit it to the Submissions Area.
This assignment is worth 100 points and will be graded according to the following rubric.
Assignment: Business Plan Breakdown 3—The Simplified Financial Plan Grading Criteria & Maximum Points
Estimate capital requirements, use of capital, start-up requirements (if applicable), and other probable costs involved in the implementation and subsequent operation of your project. 12pts.
Identify sources of financing and define a payback period. 8pts.
Prepare cash flow projections. 12pts.
Prepare a projected balance sheet representing the end of the first calendar year of operations, and defining assets and liabilities, both current and long term 12pts.
Prepare income statement projections for the end of the first calendar year of operations, including charts showing gross revenues, gross profit, and net income. 12pts.
Define the meaning of a breakeven analysis and prepare one to reflect your project. 12pts.
Prepare a ratio analysis, including the definition and the value of the following ratios (whenever applicable): current, quick, debt, debt to equity, average inventory turnover, receivables turnover, payables turnover, net sales to working capital, net profit to sales, and net profit to equity. 12pts.
Prepare a list of possible risks associated with the implementation and future operation of your project, and provide significance for each of them. 12pts.
Write in a clear, concise, and organized manner; demonstrate ethical scholarship in accurate representation and attribution of sources; display accurate spelling, grammar, and punctuation. 8pts.
Total:
100 pts.
Turned-in on time, Grading criteria followed All assignment qualifications addressed correctly, Grading Criteria followed, Include Question followed by the answer Reference Page Included Cover page Included, Paragraphs Indented, Running-head included, main heading should be centered; all new paragraphs should be indented; paper should be right ragged, not right justified; references, should always go on a standalone page. abstracts are not usually indented; acronyms should be spelled out when using them for the first time, for example HR. references as listed are APA standard. When you submit your papers through turnitin.com, your overall similarity index score should not be exceedingly high, with ten to fifteen percent being the maximum, Please make sure your APA formatting of citations. I have provided the APA resource cite for you. https://owl.english.purdue.edu/owl/resource/560/01, Please work on using literature within the span of the last 5 years, keep in mind there should not be any one, two, or three sentence paragraphs
Your response should be thorough and address all components of the discussion question in detail, include citations of all sources, where needed, according to the APA Style, and demonstrate accurate spelling, grammar, and punctuation
HEADS-UP
Just for references here’s the Instructors Comments from the attached assignment: I enjoyed your paper, about fast food in Singapore. Your explanation of the initiative is clear, but let’s go deeper into what the food is – is your focus hamburgers, salads, fish-n-chips, etc…. Your plan does provide specificity in terms of mission, core believes and culture, and the social responsibility commitment, where applicable. Go deeper with your research methods identified are appropriate to assess the feasibility of the opportunity. I want to see a deeper analysis that addresses industry trends, environmental trends, the target audience, and other competition. As to your writing: I reviewed your work against the GRADING RUBIC. First I looked that you went to the AUO library to find a minimum of three academic peer-reviewed scholarly journal articles. Should you ever need help getting what you need in the library don’t forget our great librarians. I’ve always found them fast and friendly when I’ve used them myself. Be sure that ALL opinions are backed up with the experts. Research academic articles in the library. Have stronger ties to your textbook. I want to see you use the weekly theories and concepts in each assignment. Watching writing. You need to have strong intro, body, conclusion not only for your paper but for each paragraph. Remember as per posted policy I do not want other people’s words so no quotes. You’re your source, close it, reword it, and cite. Lastly: Watch mechanics
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