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