Entering into a new “business for self” venture is most risky at best. Substantive demands can by placed on the entrepreneur’s financial well-being, if proper planning is not completed to enable informed decisions. While completion of a formal business plan should provide the information to soften/mitigate the overall financial risk, valued preliminary planning can provide the comfort needed to pursue this more formalized process that includes;

• the business proposal, goals and achievement plan
• management background, skills inventory and roles within the business
• market analysis identifying and describing suppliers, customers and competitors
• project costs and financing, cash flow and profit analysis.
• time lines and schedules

The aforementioned preliminary planing process, from a financial perspective should answer the following basic questions.

• How much of a wage/draw do I/we require from my new business.
• How much in sales do I/we require to break even or make a profit.
• How much capital do I/we require to open/operate and where does it come from.
• How much cash do I/we require to sustain day to day business.

 The preliminary exercises relative to these questions are as follows.