Financial Preparation for Entrepreneurial Ventures - Blog #9

Financially Prepare for Entrepreneurship

Pay down debt

•Call creditors and negotiate a lower interest rate

•Don’t close those $0 balance account

•Use windfalls properly

Build a cash cushion

Purchase some key benefits while you are still employed

The benefits available through your employer are almost always better and less expensive than benefits available to individuals or small businesses, but there are some ways you can leverage those benefits to your advantage.  Before you strike out on your own, explore these possibilities:

•Check if any of your current benefits are portable
•Purchase disability insurance: 
•Make contributions to a Health Savings Account (HSA): 

 PREPARING FINANCIAL STATEMENTS

One of the most powerful tools the entrepreneur can use in planning financial operations is a budget. 4 The operating budget is a statement of estimated income and expenses over a specified period of time. Another common type of budget is the cash budget, which is a statement of estimated cash receipts and expenditures over a specified period of time. It is typical for a firm to prepare both types of budgets by first computing an operating budget and then constructing a cash budget based on the operating budget. A third common type of budget is the capital budget, which is used to plan expenditures on assets whose returns are expected to last beyond one year. This section examines all three of these budgets: op­erating, cash flow, and capital. Then the preparation of pro forma financial statements from these budgets is discussed.

 

http://www.startupnation.com/business-articles/1274/1/financially-prepare-entrepreneurship.asp