What Is a Balance Sheet?

Up and Running

If you’re in the process of starting a business or writing a business plan document, you’ll have heard the phrase “balance sheet” mentioned, or maybe you’ve seen one in a sample business plan. In this article, I’ll review: The components of a balance sheet.

Sales Pipeline Explained

ithacaVC

What is a sales pipeline? But after some recent conversations with some sales guys, I thought i should write down an explanation. Well, a sales pipeline should be the same way. One of the key pieces of information is a projection model that shows a projected income statement and cash flow statement for the given year (the balance sheet for an early stage startup is less important, but also nice to have). With the sales pipeline it is an educated guess.

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The Agony and Ecstasy of Selling My First Company

Feld Thoughts

I thought it was a great description and encourage every entrepreneur who has never been through the sale of a company to read it. We always had very clean financials because we took it seriously so he quickly sized up our income statement and balance sheet. Len explained that was their formula for doing deals – 2x multiple of Net Income + balance sheet cash + a three year employment deal. Entrepreneurship feld technologies m&a sale

How to Make Sense of your Small Business Financial Statements

Up and Running

No doubt you refer to your income statement and your bank account for the basics, but the truth is most businesses ignore the most powerful financial tools in the accounting arsenal: the balance sheet and the cash flow statement. The Balance Sheet.

How to Forecast Cash Flow

Up and Running

When your business makes a sale to a customer on account, that amount adds to sales in your Profit and Loss Statement, but it sits in Assets as Accounts Receivable until the customer pays. It reconciles the Profit and Loss with the Balance.

[Infographic] Inside The Mind Of A Startup Entrepreneur

YoungUpstarts

Understand a term sheet. Sales. Analyze a balance sheet. Balance the books. What makes an entrepreneur tick? Perhaps the better question is – what kind of leader makes the best entrepreneur?

The Resetting of the Startup Industry

Both Sides of the Table

But I would point out that raising money is an existential event and I think in the coming 12-18 months you may see loss ratios (companies going out of business or selling in fire sales) go up.

Why large companies acquire small companies

A Smart Bear: Startups and Marketing for Geeks

In terms of acquisition, they ask more specifically: “How can we trade balance sheet assets (cash, equity) in exchange for executing our strategy better?”. Pundits couldn’t agree how to analyze the sale of Instagram to Facebook.

No Accounting For Startups

Steve Blank

One of the ways our VC’s kept track of our progress was by taking a monthly look at three financial documents: Income Statement, Balance Sheet and Cash Flow Statement. Dave McClure’s AARRR Model is one illustration of the web sales pipeline.

An Inside Scoop on the Funding Environment and What it Might Mean for You

Both Sides of the Table

forward sales with some as high as 12x sales. So we brought in experience hand Mark Woodward who had taken 2 companies public and had a storied sales leadership turned CEO career where he learned in academy-rich Oracle. $30 million.

Life Audit: 4 Ways To Reprogram Your Life

YoungUpstarts

It’s a balance sheet where you live in the present and ask yourself where you want to go from here. Find Financial Balance. You don’t need an accounting degree to understand your balance sheet and build wealth. billion in sales in 2015.

What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

We want a strong balance sheet (um, ok. but that’s our firm’s money on your balance sheet. Gross margin (GM) is the amount of profit you make per sale of your product or service taking into account your total costs of selling that product or service. If you have a very low gross margin (10-30%) it can be very hard to build a large, scalable business because you need to make a lot of sales to cover your operating costs.

10 Things the Bank Will Ask When You Need a Business Loan

Up and Running

Would you want your bank to invest your checking account balance in a startup? That includes aging, account-by-account information (for checking their credit), and sales and payment history. That bank loan you want for your company?

Did The 900-Pound Gorilla Just Vanquish Your Startup Or Validate It?

OnStartups

While the direct ad sales space is interesting, Google crushing my business will have an infinitesimally small impact on their balance sheet. It could be that the direct ad sales landscape is just starting to mature enough to the point where they think it’s worth making a play.

Spring Clean Your Financials Now for a Better Sale Price Later

Inc Startups

Having your books in order will boost your business value. The snow is melting, the birds are chirping and this year''s tax season is nearly behind you. But before you dump your financial documents into the filing cabinet, there''s something else you need to do.

9 Deadliest Start-up Sins

Steve Blank

Traditionally, engineering, sales, and marketing have all focused on the immovable launch date. Financial progress is tracked using metrics like income statement, balance sheet, and cash flow. Executing on a sales and marketing plan.

Fauxmentum

Both Sides of the Table

I’m not saying don’t hire sales staff or market your products aggressively. I always encourage startups to seek a healthy balance of corporate revenue to balance their startup-company revenue. But as with any sales advice, revenue diversity matters.

How and Why to Manage Cash Flow

Up and Running

All our training results in the equation business = sales – costs and expenses = profit. How many times have you read in the scandal sheets about some celebrity who “has” all the money in the world — and yet is flat broke? Change #1: More Sales on Credit.

The Key Elements of the Financial Plan

Up and Running

Balance sheet. Sales forecast. A typical profit and loss statement should include: your revenue (also called sales), followed by. your “cost of sale” or “cost of goods sold” (COGS)—keep in mind, some types of companies, such as a services firm, may not have COGS.

5 Ways to be More Profitable Before Christmas by Christine Rico

Mike Michalowicz

For a small business; generally you have to increase sales to find economies of scale in your other costs. To increase sales; hire people. Even if you produce a wonderful product, if you don’t connect with customers and actually make the sale, it doesn’t work.

Why GE’s Jeff Immelt Lost His Job – Disruption and Activist Investors

Steve Blank

With refrains of “unlock hidden value” and “increase shareholder value,” and powered by over $120 billion in assets , activist investors like Trian look for companies like GE (or Procter and Gamble) that have a share price which is underperforming relative to its peers (or those with large amounts of cash on their balance sheets). Or they may even put the entire company up for sale. This article first appeared on the Harvard Business Review blog.

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9 “Must-Have” Tools for Launching a Startup

Blogtrepreneur | Entrepreneur Blog

You probably don’t have a large sales force with a database of customers – you have to keep track of those customers in the most efficient and time- saving way as possible. Reach out to Joe and get him into your sales funnel with this tool. Image via globaldigitalcitizen.org.

4 Ways Entrepreneurs Can Make The Most Of The Leap Year

YoungUpstarts

Evaluate your balance sheets and take note of any growing expenditures. Surprise and Delight Customers with a Leap Year Sale. This leap day is a chance to attract new customers through a special leap year sale. Incentivize Employees with a Leap Year Sales Challenge.

Visualizing the Interactions Between CAC, Churn and LTV

A Smart Bear: Startups and Marketing for Geeks

If you like this, go see his Shockwave Innovations blog ) Anyone that has taken an accounting class or learned basic business financials knows the interaction between key elements of a P&L (revenue, cost, expense) and a balance sheet (assets, liabilities, equity).

Why Companies are Not Startups

Steve Blank

A consequence of using these corporate finance metrics like RONA and IRR is that it ‘s a lot easier to get these numbers to look great by 1) outsourcing everything, 2) getting assets off the balance sheet and 3) only investing in things that pay off fast.

The 7 Key Metrics Every Business Owner Should Monitor

Up and Running

In your company’s financial statements, accounts payable will show up on your balance sheet as a liability. Cash burn rate is the rate at which a company uses up its cash reserves or cash balance.

How to Write a Business Plan: Use This Checklist to Keep Yourself on Task

Up and Running

Set your sales goals and create a budget for your expenses. Build a sales forecast. Discuss your marketing plan and your sales plan. Arguably one of the most important parts of your business plan, this will include: A Revenue/Sales Forecast. Projected Balance Sheet.

How to Write an Executive Summary

Up and Running

For example, with an existing company, that information might be as simple as adding recent annual sales or number of employees to the basic company information in the first bullet here. What is an executive summary? An executive summary is the brief introduction to a business plan.

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Cash Flow 101: Building a Cash Flow Statement

Up and Running

Most transactions relating to the sale or purchase of property, equipment, or other non-current assets are included in your investing activities, as are any expenses tied up in mergers or acquisitions. (Note: This is the third installment in our “Cash Flow 101” series.

3 Ways Structure Can Take Your Tech Startup To New Heights

YoungUpstarts

Whether it’s burn rates, balance sheets, or P&L and cash flow statements, financial documents say a lot about your operations — and you need to be able to speak the language. by Gadiel Morantes , chief revenue officer at Early Growth Financial Services.

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The Best Time To Sell Your Business

Mike Michalowicz

when your sales are good, but your profits are bad. If your business has a healthy balance sheet. if sales are good and profits are better. Entrepreneur Strategies Entrepreneurship Motivation Sales Strategies business healthy investors sell worth

How to Build an Adaptability Advantage

Inc Startups

We watch what our competitors are doing, as well--but we put a particularly strong focus on the information our customers provide (both directly--in feedback--and indirectly in the size of sales, length of engagement, and the frequency and severity of customer service complaints)."

Should Startups Care About Profitability?

Both Sides of the Table

The most obvious way to explain this is with sales people. If you hire 6 senior sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business 6 months.

Five Ways to Automate Your Small Business

Blogtrepreneur | Entrepreneur Blog

As you might be reveling in self-doubt or taking a personal inventory of your life balance, you might be thinking about the payoff. It involves using technology to organize, automate, and synchronize sales, marketing, customer service, and technical support. You finally did it!

5 Critical Things Entrepreneurs Need to Know about Managing Their Company's Finances.

Small Business Force

This doesn't mean you have to become a CPA or go take a boatload of accounting courses, but, at least, learn to understand what's in a basic income statement and balance sheet and what they mean.

In 15 Years From Now Half of US Universities May Be in Bankruptcy. My Surprise Discussion with @ClayChristensen

Both Sides of the Table

The numerator (return) encourages more sales, which is fine. But “on capital employed” encourages companies to push more off balance sheet and thus into offshore & outsourced situations. “In 15 Years From Now Half of US Universities May Be in Bankruptcy.”

How to value your SaaS company

Seth Levine's VC Adventure

Healthy SaaS companies balance growth and profitability. More on this below, but growth is more important than profitability, subject to the balance in the rule of 40 note above. Ultimately churn is a drag on growth and on sales efficiency.

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Buying a Company: How Not To Be HP

Inc Startups

Just because a company is for sale, and you have the money to buy it, doesn’t mean you’ll be worth more post-transaction. These things often don’t show up on balance sheets and can be a big surprise to the buyer when the deal is done.

Five Critical Ways To Become Indispensable In Business

YoungUpstarts

Then design, propose and get concurrence on the specific ways you will deliver their personal win and fulfill the hidden and unique motivations that are often not found on contracts, income statements and balance sheets.

How to Create an Expense Budget

Up and Running

And regardless of what you call it, when you combine it with projected sales and costs, you have what you need to project your profit or loss. Those go in your sales forecast. That money affects your cash flow and your balance sheet, but not your profits.