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Developing Financial Projections for Non-Finance People

You’re sitting in a meeting with investors eager to hear your pitch. You’ve got great industry experience and credentials. You’re hoping to raise enough money to bring your great idea to implementation. You ask for an initial investment of a million dollars.

The investors take out their pocket calculators and their sharpest pencils. The questions begin.

  • “What are you going to spend it on?”

  • “How does that flow through?”

  • "Where are your existing statements?”

  • "What are the bases for your projections?”

  • "How did you develop these income statements?”

  • "How did you set up this balance sheet?”

  • "What have you invested so far, and in what exactly?”

They want to see the road map of every penny in and out of your business, from Day 1 and well into the future. But you’re an idea person, not a bean-counter. You’re an action-oriented entrepreneur, not a stuffy MBA. Can’t you just hire someone to answer these questions for you?

When you personally don’t know the answer to these questions, one of two bad things can happen. Either you don’t get the money, or you get taken advantage of.

Not getting the money is bad. But getting taken advantage of can be much worse. Here’s what that can look like:
  • Your investor knows you have a great idea and you’re naďve or ignorant about the financials. They might offer you $1 million in exchange for 50% of your company. The better you understand the financial implications of your business, the more of it you get to keep.

  • You apply for a bank loan with your patent as collateral. Your banker may try to give you a loan of 50% LTV instead of 75%. Now they can take asset and sell it if you fail. Your ignorance has contributed to a situation where it’s in your banker’s interest to underfund you so you do fail.

  • Your investor can deliberately underfund you so they can cut you out of your management position down the road. They can blame the lack of profitability on your management skills rather than their own deliberate choking of your financials.

Think this doesn’t happen? An online pharmacy was bought out for $10 million and later sold by an investment group for $500 million. The entrepreneur who created it had no idea of its worth, so he was taken to the cleaners by savvy investors.

Think this can’t happen to you? After all, you deal with honorable people… The question is, whose job is it to look out for your interests? Whose job is it to understand the financial potential and implications of your ideas and your efforts? Don’t you want the tools to be able to determine if your business partners are knowledgeable and trustworthy about finance?

If you ever plan to raise money from anyone other than your brother-in-law, you must be able to understand and speak “finance.”

But your need to understand finance doesn’t end after the first round of funding.

You need to develop financial projections at every stage of a business’s life: in business plans, in government filings, for operational planning purposes, for retirement and succession planning. Every director, officer, and manager needs to understand the basics of the language of finance.

This White Paper gives you the tools to answer the two most important questions any business must ask: “Are you financially prepared to begin? Are we able to sustain ourselves?” These 13 pages are the difference between feeling (and being!) inadequate and knowing what people are talking about. Your ability to understand basic finance can be the difference between short- and long-term success or failure.

You’ll learn:
  • What’s on financial statements and how they get there

  • How to develop and understand income statements

  • How to set up and read balance sheets

  • How to use common formulas to evaluate cash flow

  • How to create a budget using standard guidelines

  • How to read and evaluate income projections

  • How to develop your own financial projections through a “fill in the blanks” approach”

  • How to accurately determine the value of your idea or business

    The White Paper isn’t an MBA-in-a-Box. It doesn’t go into the history or philosophy of finance. It just helps you understand, communicate, and direct your own business prospects. It shows you how to fill in the blanks to develop your own financial projections. Once you do it, you’ll understand it well enough to sit at the table with the savviest investors and protect your interests.

Want to know more?

Download the White Paper "Developing Financial Projections" for just $39.95.


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   Pitching Investors

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