1. Create a Qualitative Business Plan
What assets do you need and where can you get the money to buy them?
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Sales forecasting
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Forecasting expenses
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Cash flow problems kill companies
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The complete set of forecasted financial statements
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2. Capture Basic Business Data
Wasatch Medical Center and paper records
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A simple spreadsheet
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Basic accounting software
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Payroll recordkeeping
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3. Small Business Income Taxes
The only financial data in a small-town bookstore
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Business income tax report: U.S. Schedule C
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The entity concept: Separating personal from business expenses
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4. Prepare Financial Reports to Be Shown to Outsiders
How can you get strangers to provide you with financing?
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Financial reports for banks, potential investors, and partners
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Earnings management and user skepticism
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Auditors
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5. Reports and Records Needed to Sell a Business
Valuing a family-owned business
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The benefits of internal controls
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Valuation using the price-earnings multiple
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Valuation using the price-to-book multiple
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Valuation using the price-to-sales multiple
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Establishing the credibility of income forecasts
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Conclusion
Avoid the temptation to ignore recordkeeping
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Glossary_Financial_Record_Keeping.zip
(102 KB)