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Show Rage 2000 Business 36 Review What is status of local economy : crisis or opportunity? continued from p.iite 4 address are: What are the most important duties of the business and who will handle each function of the business? 2. What is your background or experience in this type of business? Can you fulfill the functions of the business yourself? 3. If you cant fulfill the functions, who will? Marketing information will be paramount in importance to any business. This will be the basis by which you arc able to produce revenue. Judge your business concept in terms of the Plus, of marketing Product; Price; Place; Promotion, Plus an alternate use of the product or service. Areas to consider in marketing for your 1 . s, business include: 1. What is the industry trend? 2. Who is your customer, exactly? 3. Who is your competition? How will you compete? (Dont forget the internet) Whcrehow will you sell your product or service to your 4. customer? 5. What is the promotional strategy to introduce your business to the customers? Carefully consider advertising, public relations, distribution, location, pricing, and direct sales. Understanding the financial implications of the business concept will be a major determining factor in the feasibility. You will need to analyze all of the start-u- p or expansion costs and sources of financing for the idea to use the cash flow projection as a budget for your business. If outlays are higher or lower, you will be able to identify what caused the discrepancy and make any adjustments. Your cash flow analysis should show: 1. How much cash your business will need; 2. When the cash will be needed; 3. How to plan for cash need?; 4. Where the cash will come from; 5. Relief from fear of the unknown, and; 6. Sales goals. project. To do this several elements of information will be needed. First, a cash flow and budget forecast. The cash flow forecast is the most important financial planning tool available to you. The cashflow forecast projects what your business needs in terms of dollars for a specific period of time. The projection identifies when the money will be coming in and out of your business, giving you the ability to plan for outlays, see the effect of a loan on your business, or identify when credit sales will turn into The cash flow deals actual cash transacwith only tions and not with depreciation, amortization of goodwill or h other expense items. After developed, it is a good cash-in-han- d. Second, balance sheets should be developed to indicate the financial condition of your business on a particular day. Ilia balance sheet is de non-cas- signed to show how the assets, liabilities and net worth of a business are distributed at any given point in time. Balance sheets for all businesses contain the same categories arranged in the same order. The difference is one of detail: Your balance sheets should be organized and designed with your business information needs in mind-frothe information provided in the balance sheets liquidity ratios should be determined. These ratios will provide benchmark data as to the condition of the business financially in relation to other successful businesses in the same industry. Third, it is a good idea to determine the break-eve- n point of the business concept based on m the marketing information gathered. Determine the brake-eve- n point of the business in terms of both sales dollars and number of sales. If you determine that the business WE WANT TO WORK FOR does not break even you should be prepared to: (1) absorb the loss (hopefully successfully, (2) cut balk on the projections (3) tighten up and cut back on fixed expenses, or; (4) raise your prices. . By careful consideration of a business idea or concept it may be possible to turn a crisis situation into an opportunity situation. 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