E)   Financial Issues:

151. How much cash do you have available to invest into the business? The more funds you invest shows an investor or lender that you are committed to the proposed business. That is, lenders are more apt to provide you with the necessary funding to start or expand your company.

151b. What is Net Worth

152. Are you familiar with the various ways to finance a business?

153. Are you are aware of the 3 classes of capital and financing?

154. What fixed or capital assets will you invest into the business. Examples of fixed or capital assets include a computer, printer, office desk, filling cabinet, other office equipment, office furniture, building, land, vehicle, etc. If you are investing such assets into the business, be sure to estimate a fair market value of each asset.

155. Will someone other than you invest cash or other assets in the company? If so, who is the investor, how much will he/she invest, and what are the repayment terms? Is the investment a loan or is the investor receiving an equity share of the company in change for the investment?

156. Do you have any personal assets that can be pledged as collateral for financing purposes?

157. What financial or academic government programs are available to your company? (IE What sources of financing are available for you and your business)?

158. How much will you charge customers for your products or services?

159. How did you arrive at the price for your products or services?

160. Will your offer any discounts to your customers?

161. Will you offer credit terms to your customers? What terms will you offer? (e.g. 30 days to pay).

162. Will you charge interest to customers who do not pay promptly?

163. What policies do you have in place to deal with customers who fail to pay?

164. What is your anticipated gross margin?

165. Have you opened a bank account for your business yet? Hint: If you plan to register a sole-proprietorship, be sure to establish a business bank account. In other words, do NOT use your existing personal account for business transactions. Keep personal and business affairs separate.

166. Who will perform your businesses' monthly bank reconciliation? Be sure to develop your bank reconciliation each and every month! This will improve your chances of catching fraud or theft within your business.

167. If you intend to establish a retail outlet, do you intend to use a “Point of Sale” system?

168. Who will perform the bookkeeping duties for your business? How much will this cost per month?

169. Do you plan to use a manual or computerized accounting system?

170. Who will prepare your year-end tax returns? In many cases, a bookkeeper is not be educated enough on all possible tax deductions. This being the case, most entrepreneurs hire a professional accounting firm to prepare their personal and business tax returns.

171. Will you accept Interact, Visa, MasterCard, American Express, PayPal, etc? If so, what steps have been taken and are you aware of all the costs & charges for each merchant account?

172. Do you need a float in your cash register, if so, how much will you require?

173. If applicable, who will be responsible for balancing the cash at the end of each business day? This is important and can detect theft or fraud.

174. Will you need a petty cash fund? If so, who will be in charge of it and what will be your policy on use of petty cash. Most small companies have a petty cash fund of $100 to $250.

175. Do you require a Line of Credit at startup or expect to need one sometime in the near future?

176. Should you require additional financing after start-up, what sources are available in your area?

177. Do you know how to organize the financial section of the business plan?

178. Have you determined your Selling Prices and Product Costs?

179. If you are selling multiple products, have you calculated a Weighted Average Selling Price?

180. If you are selling multiple products, have you calculated a Weighted Average Product Cost?

180 b.  Do you know what your company's contribution margin?

180c.   What is your contribution margin ratio?

180d.  What Types of Revenue does your business have?

181. Do you know how to develop a Sales Budget?

182. Do you know how to develop a Purchase Budget?

183. Do you know how to develop a Direct Manufacturing Labor Budget? (if required)

184. Do you know how to develop a Manufacturing Factory Overhead Budget? (if required)

185. Do you know how to develop an Ending Inventory Budget?

186. Do you know how to develop a Cost of Goods Sold Budget?

187. Do you know how to develop a Fixed Assets Budget?

188. Do you know how to develop an Operating Expense Budget?

189. Do you know how to develop a Drawings or Dividends Budget?

190. Do you know how to develop a Cash Investments into the Company?

191. Do you know how to develop an Opening Balance Sheet?

192. Do you know how to develop an Interest Expense Budget?

193. Do you know how to develop an Income Tax Rate & Income Tax Budget?

194. What method of depreciation will you use in your forecasted financial statements?

195. Do you know how to develop Forecasted Financial Statements?

196. Do you know how to develop a Forecasted Cash Flow Statements?

197. Do you know how to develop a Forecasted Income Statements?

198. Do you know how to develop a Forecasted Balance Sheet?

199. Do you know how to develop a Forecasted Break-even Analysis?

200. Do you know how to develop Forecasted Ratio Analysis?

201. Do you know how to develop a Forecasted Sensitivity Analysis?

202. Do you know how to develop Notes to your Forecasted Financial Statements?

203. Do you know what your “personal net worth” is? (I.E. your assets minus your liabilities). If you apply for business or personal financing, you will need to develop a Personal Net-Worth Statement. Also known as a Statement of Personal Affairs.

204. What is your Credit Rating?  Your credit rating is important since financing for your business generally relies on having a specific numeric score.  In other words, if you have a so called acceptable score, chances are you should be able to acquire the necessary financing for your business start-up or expansion.  An acceptable score ranges from one financial institution to another.

No matter if you are planning on starting a business or not, be sure to acquire an updated credit rating score as soon as possible.  Identify theft has been on the rise over the past five years.....  If you are concerned about your credit rating or whether someone has stolen your identity, you can get a free credit rating report.