This episode discusses some key concepts needed to understand the financial condition of an enterprise. The episode emphasizes on budget development, determining start-up investment need and financing alternatives.
- Know the fundamentals of financial statements
- Know how to design a budget for new projects and ventures
- Know financing alternatives for creative enterprises
- Initial investment – Identify the resources necessary to start your operation. Start by making a list of expenses and assets. Aggregate them in categories such as operational expenses, equipment purchases, inventory, etc. Then, identify your available resources: cash, equipment, in-kind, etc. Finally, identify and plan your funding sources to cover that initial investment: contributions from the owners, private investment or loans. Make sure there is a balance between the three components. In general, a bank or investor will not contribute 100% to the initial investment.
- Financial statements – Prepare a proforma financial statements using the models presented in the book (Income Statement, Balance Sheet and Cash Flow Statement). Prepare a list of notes for each of the sources of income and expenses that explain the assumptions that led you to use those totals.
- Financing plan – Create a crowdfunding campaign to generate seed capital for your enterprise. Analyze the requirements and payment methods of various platforms and choose the one that best suits you. Establish a budget, write the description of the project, create a script for your video, structure a contact database and create a calendar for social networks.