When a social or a normal enterprise is to be established, startup and working capital is needed. For this reason, a budget including the startup and working capital that will be needed during establishment and execution phase should be prepared. In the preparation phase of the initial budget of the initiative, the following topics should be considered as a basis:
Determining the start-up / setup costs of the business
Determination of monthly running expenses
Entrepreneur’s survival budget (and employee salaries)
Where to get the needed financing
The money the business will generate
Time to breakeven in sales
The entrepreneur should use resources correctly and pay attention to cash management during financing activities. To do this successfully, one must have at least financial literacy and basic knowledge of accounting / financial statements.
Financial management is the management of the financial situation of a business in order to achieve certain financial goals. Finance management carries out the function of planning and supervision, ensures the management of cash flow for the success of the business. Thus, we will provide you information about the setup costs and running expenses, determining the price of your product and/or service, sales forecasting, capacity planning and preparing your budget. We will finish this chapter with the cash flow forecasting and financial statements sections. You will have all the necessary information for the financial management of your business.
