Business Plan Video Part 5

Filed in archive Writing a Business Plan on February 26, 2008

Here is Part 5 of the Business Plan video series.

This one is one of the most important and I urge you to listen to it a few times if you are new to financial statements. The video does an excellent job of giving you the basics of a Profit and Loss Statement, Balance Sheet and the Cash Flow Statement.

While many people get excited if they see a profit in the profit and loss statement, the numbers in the Cash Flow can be much more important. The Cash Flow statement shows how much money you have today to operate your business. Even if you are making a profit doesn't matter if you do not have enough money to make it through the week.

As I have mentioned before it is important to have a good bookkeeper and/or accountant. However, no matter how good they are, you also need to have a good understanding of these financial statements so that you know were your business stands and how well it is doing.

Once you have the basics down I recommend you find a good book on financial accounting and read through it. While it will not be a nail biting page turner, you it will give you the resources you need to effectively run your business.