1300 187 187
Thoroughly updated to reflect the impact of the 2008 recession, this new edition presents an applied, realistic view of entrepreneurial finance for today's entrepreneur. The book provides an integrated set of concepts and applications, drawing from entrepreneurship, finance, and accounting. The book's contents are designed to follow the life cycle of a new business venture. Topics are presented in a logical order, as entrepreneurs will likely face them as they begin the process of business start-up and move into growing the business. A comprehensive spreadsheet financial template is included with the book and may be downloaded for free by visiting www.drjeffcornwall.com.
| Preface | p. ix |
| Introduction | p. 3 |
| The Importance of Knowing the Numbers | p. 3 |
| Measuring Success | p. 4 |
| What Is Entrepreneurial Finance Management? | p. 5 |
| What Makes Entrepreneurial Finance Similar to Traditional Finance? | p. 7 |
| What Makes Entrepreneurial Finance Different from Traditional Finance? | p. 8 |
| How the Lack of Historical Data and Liquidity Complicates the Practice of Finance in Early Stage Firms | p. 11 |
| Using Stakeholder Analysis to Guide Ethical Decision Making | p. 12 |
| Summary | p. 14 |
| Building a Financial Forecast | p. 15 |
| Setting Financial Goals | p. 17 |
| Wealth Versus Income | p. 17 |
| Integrating Nonfinancial Goals into the Business | p. 20 |
| The Importance of Self-Assessment | p. 21 |
| The Self-Assessment Process | p. 24 |
| The Business Model and Business Plan | p. 25 |
| Summary | p. 26 |
| Individual Entrepreneurial Self-Assessment | p. 28 |
| Partnership and Shareholder Assessment | p. 29 |
| Understanding Financial Statements | p. 31 |
| The Accounting Equation | p. 31 |
| An Example | p. 32 |
| Basic Financial Statements | p. 41 |
| The Limitations of Business Financial Statements | p. 48 |
| Summary | p. 49 |
| Revenue Forecasting | p. 52 |
| Common forecasting Mistakes | p. 52 |
| The Link Between the Marketing Plan and Revenue Forecasts | p. 54 |
| Creating Scenarios | p. 57 |
| The Link Between the Revenue Forecast and the Cash Flow Forecast | p. 58 |
| The Impact of Business Type on Revenues | p. 59 |
| Quantitative Forecasting Techniques | p. 65 |
| The Importance of Revenue Forecasting | p. 68 |
| Summary | p. 69 |
| Expense Forecasting | p. 72 |
| Defining Costs | p. 72 |
| Cost Behavior | p. 73 |
| Breakeven Analysis | p. 77 |
| Expense Forecasting: Impact of Business Type on Expenses | p. 78 |
| Reducing Expenses Through Bootstrapping | p. 83 |
| Summary | p. 83 |
| Integrated Financial Model | p. 86 |
| The Entrepreneur's Aspirations Reconsidered | p. 86 |
| Contribution Format Income Statement | p. 87 |
| Earnings Before Interest and Taxes | p. 87 |
| Inventory of Assumptions | p. 88 |
| Social Ventures | p. 89 |
| Determining the Amount of Funds Needed | p. 89 |
| Using the Forecasting Template to Determine the Amount of Funds Needed | p. 90 |
| Time Out of Cash | p. 91 |
| Assessment of Risk Sensitivity | p. 92 |
| Integrating Financial Forecasts into Business Plan or Funding Document | p. 93 |
| Summary | p. 93 |
| Instructions for Using the Integrated Financial Statements Template | p. 96 |
| Managing the Financial Resources of a Venture | p. 121 |
| Monitoring Financial Performance | p. 123 |
| Tracking Assumptions | p. 123 |
| Establishing Milestones | p. 125 |
| Using Numbers to Manage | p. 126 |
| Financial Statement Analysis | p. 127 |
| Ratio Analysis | p. 129 |
| Working with Accountants | p. 137 |
| Summary | p. 138 |
| Day-to-Day Cash Flow Management and Forecasting | p. 140 |
| Why Is Cash Flow Different from Net Income? | p. 140 |
| Why Is an Accural-Based Income Statement Important? | p. 141 |
| How Is Cash Flow Measured? | p. 141 |
| Interpreting a Statement of Cash Flows: Direct Method | p. 144 |
| Statement of Cash Flows: Indirect Method | p. 145 |
| Investors' and Creditors' Use of the Cash Flow Statement | p. 148 |
| Effective Cash Management | p. 149 |
| The Emotional Side of Cash Flow Management | p. 152 |
| Summary | p. 153 |
| Sources of Financing | p. 155 |
| Financing Over the Life of a Venture | p. 157 |
| Common Misconceptions About Entrepreneurial Financing | p. 157 |
| The Diverse Nature of Business Financing | p. 158 |
| Financing Small Businesses with Modest Growth Potential | p. 161 |
| Financing High-Growth, High-Potential Ventures | p. 162 |
| Summary | p. 163 |
| Start-Up Financing from the Entrepreneur, Friends, and Family | p. 165 |
| Self-Financing | p. 165 |
| Advantages and Disadvantages of Self-Financing | p. 167 |
| Friends and Family Financing | p. 169 |
| Structure of Funds Invested | p. 174 |
| Summary | p. 174 |
| Bootstrapping | p. 176 |
| Why Bootstrap? | p. 176 |
| Bootstrapping Administrative Overhead | p. 179 |
| Bootstrapping Employee Expenses | p. 181 |
| Bootstrapping Operating Expenses | p. 183 |
| Bootstrap Marketing | p. 185 |
| The Ethics of Bootstrapping | p. 190 |
| Summary | p. 191 |
| External Sources of Funds: Equity | p. 193 |
| Angel Investors | p. 194 |
| Strategic Partners | p. 199 |
| Private Placement | p. 200 |
| Crowdfunding | p. 202 |
| SBIC | p. 203 |
| The Downside of Equity Financing | p. 203 |
| Working with Outside Investors | p. 204 |
| Summary | p. 206 |
| External Sources of Funds: Debt | p. 208 |
| Short-Term Debt | p. 208 |
| Long-Term Debt | p. 215 |
| Forms of Debt Overlooked by Entrepreneurs | p. 217 |
| Government Funding Through SBA | p. 217 |
| Working with Bankers | p. 219 |
| The Downside of Debt | p. 224 |
| Developing a Financing Plan | p. 225 |
| Summary | p. 226 |
| Financing the High-Growth Business | p. 228 |
| Integrating Profitability into the Business Plan | p. 229 |
| Stages of the Firm | p. 231 |
| Stages of Business Funding | p. 233 |
| The Dark Side of Venture Capital Financing | p. 234 |
| Initial Contact with a Venture Capitalist | p. 235 |
| Initial Public Offering | p. 237 |
| The Process of the IPO | p. 239 |
| Summary | p. 243 |
| Planning for the Entrepreneur's Transition | p. 245 |
| Business Valuation | p. 247 |
| General Concepts That Guide the Determination of Value | p. 247 |
| Basic Information Required for a Valuation | p. 252 |
| Discounted Cash Flow | p. 254 |
| Market Comparison Techniques | p. 266 |
| Summary | p. 270 |
| Exit Planning | p. 273 |
| Self-Assessment Revisited | p. 273 |
| The Ethical Side of the Entrepreneur's Transition | p. 275 |
| A Model of Exit Planning | p. 277 |
| Exit Options | p. 279 |
| The Process of Selling a Business | p. 284 |
| Postexit Issues | p. 286 |
| Summary | p. 286 |
| Index | p. 289 |
| About the Authors | p. 301 |
| Table of Contents provided by Ingram. All Rights Reserved. |
ISBN: 9780765627261
ISBN-10: 0765627264
Audience:
Professional
Format:
Hardcover
Language:
English
Number Of Pages: 336
Published: 1st October 2012
Publisher: M.E. Sharpe
Dimensions (cm): 22.9 x 15.2
x 2.0
Weight (kg): 0.558
9am - 4pm AEST, Monday - Friday
