Enter Cash Opening Balance

The opening day cash balance forms part of the opening balance sheet of the business, and includes amounts which are held by a business in the form of notes and coins (e.g. petty cash) or which are held at a bank in the form of on demand deposits such as current accounts and savings accounts.

The cash opening balance comes under the heading of current assets in the balance sheet of the business.

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Enter Fixed Assets Opening Balance

The opening day fixed assets form part of the opening balance sheet of the business, and include such items as, land, buildings, plant & machinery, fixtures & fittings, and motor vehicles.

Fixed assets are assets which have a long life and are for use within the business and not held for resale. They are not part of the trading stock, and are not involved in the day to day working capital cycle of the business so are not readily convertible into cash.

Fixed assets are sometimes referred to as long term assets or capital assets.

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How to Calculate Startup Debt Finance

Startup costs need to be funded through a combination of capital injected by the owners and investors, supplier credit and debt finance. This can be seen from our start up costs calculator which shows startup expenses and assets on the left hand side matched by the startup funding on the right hand side.

It is unlikely in a startup business that suppliers will grant substantial credit terms before the business has started trading, so having estimated the amount of startup capital available, it is possible to calculate the balance that will need to be funded by debt finance, such as startup business loans.

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How to Estimate Startup Capital

Having estimated the startup costs of the business for the financial projection, it is now necessary to consider how these costs are going to be funded. Funding can be provided either by way of capital or debt.

Startup capital is the amount of cash injected into the business by the founders and the investors to help fund the start up costs. Any startup costs not funded by capital investment will need to be funded by debt and borrowings.

In return for injecting the startup capital, the owners and investors receive a percentage of the equity of the business, and make a return on their investment either by way of capital appreciation when the business is sold, or by way of dividends paid out by the business.

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How to Estimate Start Up Assets

Small business startup assets are the costs which you need to spend to get the new business up and running, ready to start producing and selling goods and services.

They include expenditure on capital items such as land, buildings, equipment, plant and machinery, and inventory needed to get the business open for trade.

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How to Estimate Start Up Expenses

Small business startup expenses are the costs which you need to spend to get the new business up and running, ready to start producing and selling goods and services.

What you define as startup expenses is completely a matter of opinion. Some costs are clearly one off startup expenses for example legal fees to obtain a lease on new premises. Other costs are not so well defined, for example initial printing and stationary costs might be defined as startup expenses, but at some point printing and stationery becomes a normal day to day trading expense.

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Business Plan Assumptions

All financial projections are based on business plan assumptions. Listed below is a selection of the important assumptions which need to be considered and decided upon when using the Financial Projections Template to produce the financials section of your business plan.

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Balance Sheet Forecast

The projected balance sheet forecast is one of the main statements for business plan financials and is sometimes referred to as the statement of financial position. The balance sheet forecast shows a financial snapshot of the business at a specific point in time, usually at the end of  each accounting year.

There are many balance sheet forms, the layout below acts as a quick reference, and sets out the most commonly encountered accounting terms when dealing with a business plan balance sheet forecast.

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10 Common Accounting Terms You Should Know

In order to understand and be able to explain your financial projections, you need be become familiar with a few common accounting terms. The 10 accounting terms listed below are some of the most often used terms, and should help get you started.

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3 Financial Statements

There are three main financial statements you should know to be able to operate and plan your business effectively, the balance sheet statement, income statement, and the cash flow statement.

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