It is well known that small businesses face many struggles, especially when first getting started. Hiring a CPA to help you with all your small business accounting needs will help you be more prepared for the financial trials to come. George A. Spencer, CPA. P.A. has been working alongside small business owners for over 20 years — helping them create both a business plan and a financial plan that is suitable for their business. Schedule a free consultation with George A. Spencer, CPA. P.A. in Jacksonville today!
Small Business Consulting
Preparing a Business Plan
The beginning of your business plan should be quite simple. Start by giving an overview of your business. What type of company is it, and what is the purpose of the business? Really think through what your mission is with starting this small business. Where do you want to see it go in the future?
Next, your business plan should explain the organization of your business. This section should include the structure of management and how you imagine the business running as a unit. Some small businesses start out with just you, the owner. If that is the case, think into the future when your business is large enough to need more employees. How do you want the structure of management to work?
Explain in your business plan what services or products you are planning to offer through your business. In addition, explain where the need for your service or product comes from as well as any competition you have in the industry. How is your business going to be better?
Create a marketing plan. Are you planning to market your business on your own, or are you planning to hire a marketing firm? Explain your sales strategy and how you plan to get your products recognized.
Once you have finished these initial sections, it is time to move on to the financial part of your business plan. Contact George A. Spencer, CPA. P.A. today to receive assistance in preparing a business plan for your small business!
Preparing a Budget
Many small business owners don’t take the time to create a budget. Unfortunately, this is where a lot of small businesses fail. By sitting down and creating a plan of how much money you need to keep the business running, you will know exactly how much you can spend and what you need to adjust to make ends meet.
To create a budget for your small business, you will first want to calculate the revenue you have coming in. Next, determine the total amount of fixed costs your business has. This will include paying employees, taxes, and insurance. Other fixed costs that may apply are supplies as well as any building costs.
Be sure to figure in variable expenses as well as unexpected costs. These could include anything from replacing equipment to marketing costs. Fixed costs are pretty easy to calculate but variable expenses are harder to plan for. George A. Spencer, CPA. P.A. helps you prepare your budget by using his extensive knowledge of small business finances to budget an appropriate amount for all costs — fixed, variable, and unexpected. Call today for assistance creating the budget for your small business!
Preparing Financial Statements
- Profit and Loss Statement
- Balance Sheet
- Statement of Cash Flows
Profit and Loss Statement
The financial statements listed above go hand-in-hand with your budget. Once all the information for your budget is obtained, a profit and loss statement can be created. A profit and loss statement is used to quickly calculate if you have made a profit or taken a loss that month.George A. Spencer, CPA. P.A. creates this statement by first listing all the income of your small business, followed by all the expenses from the month. By simply subtracting your business’s expenses from the income, you will be able to easily see if you ended the month with profit or loss. With this information, you can see if any changes need to be made to become a more profitable small business.
If you think back to the accounting section of past math classes, you may remember hearing about the accounting equation. This equation is what the balance sheet for your small business is based on.
To prepare the balance sheet, George A. Spencer, CPA. P.A. will take all your assets and balance it to all your liabilities and your investment as the owner. A balance sheet captures the financial state of your business at any given time and shows potential lenders how your business is doing financially as well as how a loan would affect your small business.
Statement of Cash Flows
The third main financial statement is the cash flow statement. The cash flow statement is the breakdown and record keeping of all the cash as well as non-cash investments that are flowing in and out of your business over a specific period of time.
The importance of a cash flow statement to stakeholders and lenders is to see the direct relation of money coming in and money going out, as looking at just the revenue of a business doesn’t show where the money is going or how it is being generated.
Financial Impact Analysis (Requested Loan Funds)
The financial impact analysis for a small business is vital for preparing financially for possible disruptions in revenue. You need to have a plan in place of how your business will deal with any requested loan funds in the event of a disruption.
These disruptions are different for each type of business and should be customized for your specific company itself. Recognizing the areas that could be affected by the disruption is the first step — followed by how those affected areas impact your business financially. This could be weather that forces you to close for a day, decreasing sales and income, or an increase in expenses caused by overtime wages.
Once you have identified possible disruptions for your business and how they would impact it financially, strategies can be made to help financially prepare for those disruptions. Having your local CPA look over and assist in your financial impact analysis will ensure that you have an effective plan in place for the financial stability of your small business. Call George A. Spencer, CPA. P.A. in Jacksonville today for a free consultation!
Receiving Professional Small Business Consultations
Hiring a certified public accountant for your small business might be the smartest decision you can make as a business owner. While you or a bookkeeper are more than capable of preparing these financial statements and plans, having an accountant look over them and assist in their preparation will ensure that you are financially prepared for a successful small business.
George A. Spencer, CPA. P.A. is dedicated to working alongside small business owners, providing any and all small business accounting services they might need. Schedule a free consultation with George A. Spencer, CPA. P.A. in Jacksonville today!
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