Drawing Up Your Own Business Plan

The high failure rate of business start-ups has become common knowledge over time. According to the study by Van de Ven, Ar, Hudson, R and Schroeder (1984), the survival of a business over a short-term period of about a year and half is 54% and 25% over a period of six years. This means that the failure rate of business start-ups is a high 75%. Although studies show that business start-ups have a high failure rate, strategic business and financial planning, good management and marketing skills are important factors to consider to avoid failure and to be a successful business.

Long-term liabilities are different from current liabilities because it is not due within one year of the balance sheet. Some of the examples of long-term liabilities are bonds payable, long-term loans, capital leases, pension liabilities, postretirement healthcare liabilities, deferred compensation, deferred revenues, deferred income taxes, and derivative liabilities. It is important to keep current liabilities separate from long-term liabilities in order to get an accurate view of your current asset and to keep track of which liabilities should be accomplish first. Knowing which liabilities are due with a year and the amount of assets turning to cash within one year are import to lenders, financial analysts, owners, and executives of the company.

Items that are known monies of the company that have not been paid such as the salary for employees or taxes and deferred or unearned

An expense is identified as the owner’s equity reducing due to the costs associated with running the business; this includes normal business operating expenses as well as secondary operating expenses. Typical expenses shown on an income statement include the purchase of material to be sold, the freight associated with that material, the purchase accounts in which you levied those material charges, salaries and wages of your employees- to include any employee benefits (I actually refer to this as ‘salary with burden’ on my statements), office supplies, lease/rental expenses for land, building, equipment, etc. To be clear, everything that is an expense is covered in this statement, once all expenses are identified and tracked, you then sub-divide them into how they contribute to the business operations. In my line of work, our income statements show operating

3-2. Are the following balance sheet items (A) assets, (L) liabilities, or (E) stockholders’ equity?

The main elements of the balance sheet are assets and liabilities. Assets generally include both current assets (cash or equivalents that will be converted to cash within one year, such as accounts receivable, inventory, and prepaid expenses) and noncurrent assets (assets that are held for more than one year and are used in running the business, including fixed assets like property, plant, and equipment; long-term investments; and intangible assets like patents, copyrights, and goodwill). Both the total amount of assets and the makeup of asset accounts are of interest to financial analysts.

These are short-to-medium-term interest bearing, debt instruments offered by banks. And are low-risk, low-return instruments. There is usually an early

• Debt - Consists of such sources as credit extended by suppliers or a loan from a bank.

Current liability means all liabilities of the business that are to be settle in cash within the fiscal year of the operating cycle of a given firm. The majority of these current

Current Assets: current assets such as cash, accounts receivable, inventory, supplies, prepaid insurance etc. are usually close to the amount reported on the Balance Sheet.

Long-term debt consists of probable future sacrifices of economic benefits arising from present obligations that are not payable within a year or the operating cycle of the company, whichever is longer. Long term debt is a way to finance and gain capital when the company cash flow is minimal. To name a few types of long term debt: bonds payable, notes payable, mortgages payable, pension liabilities, and lease liabilities. This assignment will define basic terms such as long-term debt, bonds, mortgage, and capital leases. In addition answer questions in reference to the ABC Company journal entries, postretirement and note disclosure.

Assets, liabilities, and stockholders’ equity which are reported by companies at a specific date in the balance sheet. They also are related in the equation of basic accounting which is: Assets = Liabilities + Stockholders’ Equity. Assets which are the resources that will provide future economic benefits for the companies, are divided into four categories such as current assets, long-term assets, property, plant and equipment, and intangible assets. Current assets are the first one is listed in assets, which are assets that a company expects to convert to cash or use up within one year, include cash, receivables such as accounts receivable (less allowance for doubtful accounts), interest receivable, inventories (inventory and supplies), prepaid expenses (insurance or rent) (Kimmel, 49). The second one is long-term assets which are generally investments in stocks and bonds of other corporations that are held for more than one year, land or buildings that a company is not currently using in its operating activities, and long-term notes receivable (Kimmel, 50). Next, property, plant and equipment which are assets with relatively long useful

The premise of a business plan is to predict the future and then develop a product or service to exploit it. Most businesses are non-employer businesses, meaning that the owner is the business– there are no employees. Many entrepreneurs are simply using their assets, talents, and abilities to solve a very specific problem for a very specific client. Rather than developing a product or service for the masses, many entrepreneurs create a strategic partnership with a client who is actually engaged in designing

A business plan is so important in the business environment especially for a start-up business that normally needs to persuade third party for more money. Business might not grow according to plan along the way but without a plan, business will never be successful. Business Portal of India [n.d] states that business requires finance to start up its operation, to maintain its operation and for its growth and expansion. A good business plan will help firm achieve a certain amount of money invested by financiers. Not only help you get your money, federation of small business (2012) points out that a

Our plan is to have various t-shirt designs promoting “going green”. We also plan to have these designs printed on other things as well such as recycled bags. Our main colors that we are most definitely going to use are green on white, so that the green is very bold and simple, but we will offer other colors as well. We will use the best quality t-shirts and bags so that they will last for a long time and will be worth your money. The benefit for selling these shirts is that the customers will be our prime donator to our charities because their interest in our store is going towards our selected charities. The designs we select will be chosen carefully and selectively. We want our designs to appealing so that other people would want to buy