| It is critical to your business success that | | | | technological growth has changed many |
| you prepare realistic forecasts of your | | | | businesses and even eliminated some. Also, a |
| future business performance. You need to | | | | manufacturing company must have a reliable |
| forecast your operations for three to five | | | | source of raw materials, and the future cost |
| years in order to guide your business growth. | | | | of raw materials must be considered.Projected |
| You will need realistic forecasts to support | | | | Financial Statement |
| your business plan if you need a loan or | | | | |
| investor funds. The elements of and | | | | The pro forma financial statements will |
| influences on pro forma statements | | | | include estimated future sales, expenses, and |
| include:Prior Financial Statements | | | | profits. These items need to be broken down |
| | | | in order to be meaningful. The sales |
| Of course you will have to use previous | | | | estimates should state which salesperson, |
| financial statements if your business has | | | | which department, or which region will |
| been operating for some time. From your | | | | generate the sales. The estimated expenses |
| prior financial statements, you will use | | | | must be broken down into general and |
| sales and revenue levels, business ratios, | | | | administrative, operating expenses, |
| average expenses, and any relevant | | | | depreciation, and taxes.All of your estimates |
| information about your accounts receivable or | | | | and projections must logically flow from |
| payable. You should expect your prior | | | | previous years' financial statements. If you |
| financial statements to show financial | | | | are a start-up business, you may not have |
| improvement for each year of | | | | profits for the first year or two. You |
| operation.Internal Factors | | | | should start to show profit by the third year |
| | | | and your profits should continue to grow |
| That status of your operations is important | | | | except for occasional large expenses. Your |
| in preparing pro forma statements and | | | | pro forma statements must include estimates |
| projections. For example, you must consider | | | | of any large expenses that will affect your |
| whether your business needs to relocate due | | | | profit such as relocating, property damage, |
| to expansion, or your business needs to buy | | | | or a new marketing campaign. Unless you have |
| expensive new equipment to replace older | | | | a background in accounting or finance, you |
| models. You also must consider your | | | | will need a professional's help.Jo Ann Joy, |
| competition, how you are measuring up to | | | | Esq., MBA, CEOThe future of your business |
| them, and whether you need a new marketing | | | | starts here!You may contact Jo Ann by phone |
| plan to be more competitive. Also, consider | | | | at (602) 663-7007, by fax at (602) 324-7582, |
| whether your company needs additional | | | | by email at joannjoy@Indigo Business |
| personnel or additional training.External | | | | Solutions.net, and by mail at 2313 East |
| Factors | | | | Ocotillo Rd., Phoenix, AZ 85016. Copies of |
| | | | any articles will be provided free of |
| The status of the country's economy is very | | | | charge.For more information about these and |
| relevant to your company's future. Certain | | | | other important legal and business topics, |
| businesses may be affected by the status of | | | | and for free articles, please visit our |
| the global economy. It is important to | | | | website at Copyright 2006. All rights |
| understand the industry trends to be certain | | | | reserved. Indigo Business Solutions is a |
| that your product or services will continue | | | | registered trade name.Discover the secrets to |
| to be marketable. The amazing pace of | | | | success. |