1. MODULE 1 START-UP FINANCIAL CONSIDERATIONS WEL Financial Intelligence

2. Objectives To broaden your knowledge of the financial planning process through the following activities: Establish your personal financial needs Assess the costs involved to start a business One time start-up expenses Ongoing operating expenses Prepare an Opening Balance Sheet (financial picture of the business on opening day) Prepare a Proforma Income Statement

3. Concepts Financial Planning Personal Budgets Startup Costs One time costs Operating costs Opening Funds Requirement Balance Sheets Income Statement Module 1 Module 2 Pricing Breakeven Point Cash Flow Forecasts Module 3

4. Course Materials PowerPoint Presentations Excel File: “WEL Key Financial Worksheets” Student Reference Guide Glossary of Terms

5. Module 1 - Overview Introduction to financial planning Financial Planning is the preparation of Proforma Financial Statements, including Income Statements, Cash Flow Forecasts, Balance Sheets and other analysis.

6. Module 1 - Overview Why is Financial Planning necessary ? Avoid surprises. Determines investment required for start-up. Improves ability to obtain financing. Clarifies how investments are spent. Identifies areas of concern up front.

7. Personal Financial Needs If “yes”: How much money will you need to take from the venture ? Avoids surprises later on... Exercise guide you through analysis. Will the venture need to support you?

8. Exercise 1: Personal Budget Ex 1A. Instructions: On your own or with a study partner; Review personal expenses on the next page What can you add to this list? 10 Minutes….

9. Exercise 1 - List of personal expenses Auto expenses Auto payment Beauty shop & barber Satellite/ Cable TV Internet services/Telephone Groceries & outside meals Health insurance WHAT CAN YOU ADD?

10. Exercise 1 - List of personal expenses Auto expenses Auto payment Beauty shop & barber Satellite/ Cable TV/ Internet services/Telephone Charity Child care Clothing Credit card payments Dues and subscriptions Utilities Entertainment Gifts Groceries & outside meals Health insurance Home repairs Homeowner’s insurance Laundry and dry cleaning Life insurance Medical and dental Miscellaneous Mortgage/Rent payments Other debt payments Vacations Other

11. Assignment 1: Preparing a personal budget Ex 1B Instructions: This is an individual exercise. See WEL Key Financials Excel: Tab A Create a Personal Budget (monthly) Use this figure in future financial planning documents

12. Business Start up - Analysis of costs First challenge: determine funds required to open the venture Start up costs are all costs required to get a business off the ground and operating. Start up Costs include Two Types of Expense 12 One-Time Expenses Operating Expenses

13. Exercise 2 - One Time Expenses Ex. 2A Instructions: On your own or with a study partner Consider expenses needed BEFORE the business opens Examine the first list to get started What can your group add to this list? 5 Minutes….

14. One Time Expenses Down payment on property Rent deposit Down payment on fixtures and equipment Vehicles Decorating, remodelling Installation of equipment/fixtures/ Leasehold improvements Starting inventory What is Missing?

15. Utility set-up fees Promotion for opening Licences and permits Incorporation costs (where applicable) Professional fees Product development costs or franchise fees where applicable Unexpected expenses One Time Expenses Do you think of these?

16. Assignment 2 – Operating Expenses Operating expenses 2B Instructions: TYPE IN A SEPARATE DOCUMENT, PRINT AND BRING TO NEXT CLASS On your own or with a study partner Review WEL Key Financial Worksheets Sheet B: One-time Startup Expenses. Investigate Develop a list of one-time expenses for your new venture.

17. Assignment 3: Total Opening Funds Requirement Complete this table to determine your Opening Funds Requirements. Opening Funds Requirement A. Personal Expenses: Reference: WEL Key Financials Excel Sheet-A $________ B. One-Time Startup Expenses: Reference: WEL Key Financials Excel Sheet-B $________ C. Operating Funds: First 90 Days: Reference: WEL Key Financials Excel Sheet-C1 $________ Total Opening Funds (A+B+C): Personal, One-time Start-up and Operations (90 days) Reference: WEL Key Financials Excel Sheet-C2 $________

18. Module 1 Review You now have the financial knowledge and tools to plan your venture: A personal budget One-time Startup expenses for the venture Operating Expenses (3 month projected) Opening Funds Requirement