However, if you’re like most people and don’t have the time to read through a mountain of books, magazines and web-sites (or have the inclination to do so), then this article is for you. It will list out the main “rules of thumb” for financial planning.
How do you stop being a lone wolf? Tap into your current family and friends experiences, expertise’s, or networks. Take out a piece of paper and make a table with 4 columns.
Always use a contract between you and the contractor that has a hard date that the job must be complete. This must include a per diem penalty for everyday that the job is not done. This penalty amount will be subtracted from what you owe the contractor at pay day.
A. The business Plan clarifies the financial needs of the business and causes you to prepare a projected balance sheet, income statement and most important of all, a cash flow examples, the most important start up financial statement and the only predictor of success that i know.
The second column is entitled, “Who Can Help?” List people you already know who have skills to help you start or complete the wealth building activities. These people already know you and are very willing to give advice. If these people are unable to help, they may be referral resources for someone else who could help you achieve your goals and accelerate your wealth. Examples of people you already know can be your family (Mom, Dad, sisters, brother-in-law), friends (college, parents of your children’s friends, health club), neighbors or people from work. Go through your address book for additional people who can help.
Make sure your financial statements are put together correctly – balance sheet balances, cash flow ties in with the balance sheet and the income statement. This is a skill just like fixing your car. If you don’t know how to do it, do bluff – hire someone to build the statements for you. This does not have to be an expensive accountant or consultant. You can probably find a local MBA finance student who can do it for you as long as you provide the appropriate numbers.
First, understand the income or profit and loss statement is not the same as cash flow. These are valuable analytical tools but only measure performance at a specific moment in time.