This session outlines financial concepts and an excel-based Farm Analysis Solutions Tools (FAST) spreadsheet designed to assist small businesses develop and analyze a 5-year financial plan. The session outlines the financing segment of a multi-session business planning course for small businesses. The session is separated into two segments – break even analysis and pro-forma financial analysis.
Two vital components for a successful business plan include a deep understanding of the economics of the business and a longer-term financial plan. The economics of the business requires identifying the major revenue sources in addition to distinguishing between variable and fixed costs. Using these concepts to develop a better understanding of breakeven prices and breakeven production levels are valuable components of any business plan. These concepts are illustrated conceptually and demonstrated via an excel-based FAST tool.
The second part of the session is the development of information that is needed to develop a 5-year financial plan. Start-up costs, investments, financing and a monthly timeline are identified as critical elements to the development of a financial plan. Incorporating these components into a financial plan is discussed. A full set of financial statements and ratios are projected for 5 years. Users can enter and evaluate three potential economic and production scenarios. Moreover, the program can solve for the initial equity and debt capital required to maintain specified.
This educational program was part of a series of classes on small business planning for alternative enterprises in agriculture. A majority of the students were women.
|Conference||2008 National Women in Agriculture Educators Conference|
|Presentation Type||30-Minute Concurrent|