Business and Financial Needs

A financial plan can be defined as a business tool that is used for the quantification and monitoring of targets to be achieved by a company and help in making investment decisions and financing.

- What funding is necessary to start a business or finance an asset or to create a new line of business?
- What sales volume must be achieved to cover operating expenses?
- What benefits are expected?
- What is the value the company?

A financial plan consists of:

- Income statement and operational stalemate.
- Balance
- Investment Plan
- Plan of cash and working capital needs

In the income entrepreneurs have to learn a set of definitions that handle investors, these words are:

EBIT (Earnings Before Interest and Taxes)
EBT (Earnings Before Tax)
EBITDA
EBIT

The variable bonus payment must be conditioned on gross margin rather than sales (for errors).

In a startup you do not need a financial meltdown 8h day, but if you can have x hours a week at someone, many entrepreneurs neglect this aspect.

Vairalbes salaries must be sought in terms of objectives, payments in kind, and plan of action (“stock options” or “phantom shares”). Elena advises the use of “phantom shares” that are the economic benefits, but not ownership of the shares as a method of loyal workers.

EBITDA is one of the most important elements in a company and is used to pay for both variable and studied by many.

The Balance Sheet shows the assets, property, debts at a given time. The balance sheet analysis is always performed with ratios.

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