Revenue (also referred to as sales) is the total amount of money that your business earns from the sale of goods or services to your customers, for example, if you own a bakery and you sell 100 loaves of bread for $5 each, your revenue for that day would be $500.

Revenue is an essential measure of your business's financial health, as it indicates the amount of money your business is bringing in. However, it's important to keep in mind that revenue alone does not determine your business's profitability. You also need to take into account the costs associated with running your business, such as rent, supplies, and wages, to determine your net profit.

Depending on the type of business have and the technology you use, you can identify different sources you can rely on to quickly calculate your revenue. For example, if you have a POS or reservation system you might be able to use that to calculate revenue. Alternatively, you can go through your bank statements if you normally deposit your funds in a business bank account and look at your cash app account if you use that technology to accept payment.

Direct costs are the expenses that a business has to pay directly in order to produce or provide a product or service. These are costs that are related to making the product or providing the service, and they can vary depending on how much the business produces or provides.

For example, let's say a business makes cupcakes. The direct costs for making the cupcakes would include things like the cost of the ingredients, like flour, sugar, and eggs, as well as the cost of any packaging or decorations. The more cupcakes the business makes, the more it will have to spend on ingredients and other materials, which would be a direct cost.

Another example could be a business that provides swimming lessons. The direct costs for providing the lessons would include things like the cost of the pool rental, the cost of the instructors, and any equipment or materials needed for the lessons. The more lessons the business provides, the more it will have to spend on these direct costs.

Depending on your type of business, you might be able to find direct costs by looking through your bank statement, cash app accounts, or invoices to see payments you made to vendors

Current payables are normally what you are obligated to pay within the next year. This could be money that you owe to vendors for goods they sold you or work they've already done for you, current bill due (and past due).

Another big one may be payroll tax or sales tax that you've collected and need to pay the government authorities (that is a big and potentially dangerous one)

Also, it can include credit card debt or the current portion of a loan you have to pay in the next year.

Marketing/Sales Expenses include Marketing and sales costs are the expenses that a business has to pay in order to let people know about their products or services and persuade them to buy them. It's like when you're trying to convince people to come to your store or website by making signs and telling them how good your product or service is!

For example, you might need to pay for ads on TV, radio, or the internet to let people know about their products or services. It could also be what you pay for social media, commissions, advertising, branding, or going to networking events to find clients if that is how you reach your customers. It also might include customer retention programs such as loyalty cards or giveaways. You might also need to hire someone to create flyers, posters, or social media posts to promote your business.

Other Operating Expenses: Different business models may require different unique items in the "other" category. Look at all the expenses and cost you listed above and think if there are any other costs that are key to your business by may not be reflected above. A couple of examples may be uniform and linen costs if you are in the restaurant or medical business, janitorial and trash removal costs, and fuel or other automotive costs (especially if you are in the delivery business). Remember these are usually recurring costs that may be specific to your business or industry.

How much did you spend on core operating expenses over the past 3 years?

Current assets are

1. the value of your cash and cash equivalents (like short-term investments) that you have available to quickly access, either on hand or in the bank,

2. Receivables (money your customer or others owe you that you expect to receive in the next year) and

3. The estimated value of your inventory (value of the goods or merchandise you have that you expect to sell within the next year)

Fixed assets are things that your business owns that you use to run your business but can't easily sell, or wouldn't normally sell. This might include a computer, a cash register, or a delivery truck that you use to run your business.

This would even include the building/warehouse your business is located in, the furniture and fixtures in the building as well as and the land your business sits on but only if you own it (not lease it)

Sources of funds refers to the various origins from which money is obtained to finance a project, business, or investment. These sources can include internal funds, such as retained earnings or personal savings, as well as external funds like loans, equity investments, grants, or contributions from partners. Understanding the sources of funds is crucial for financial planning, as it helps determine how a project or business will be funded, what obligations might be attached to the funding (such as repayment terms for loans), and the overall financial structure and stability of the venture.

When thinking about uses of funds (as part of the sources and uses table) it can be helpful to break it down into what you plan to use the funding for. In general, there are 4 main categories you can use to identify your capital needs.

4 Main Categories:

 
1. Building / Land Acquisition and Build Out Cost - All the cost associated with buying the build and land (if you decide to buy) and all the construction costs to get it ready for business (such as paying your contractor to fix the plumbing, electricity, putting up drywall, HVAC systems, etc.

 
2. Furniture, Fixtures, and Equipment - Things you buy to put in the space or equipment & furniture you need to operate your business. This could include desks, sofas, computers, POS systems, tablets, servers, ovens, refrigeration, and salon chair. It could also include vehicles and tools you use to go to the customers' site.

3. Start-Up Cost - All the expenses you expect to incur BEFORE you start operations, and may include premarketing, grand opening cost, employee training, initial inventory, supplies, etc

4. Operating reserve - For new businesses and/or new sites you should include a cash buffer because businesses often need a few months before it is generating enough money to cover all the operating expenses. Depending on how long you think it will take your business to ramp up, you may need 3 to 6 months of operating reserve. You could calculate this by calculating your normal monthly operating expenses (rent, utilities, administrative cost, normal marketing cost, and other non-direct costs) and multiplying that by the number of months you estimate it would take to break even.

Describe your personal expenses and income. How will you fund yourself while you set up your business?

What are your personal assets and liabilities?