Fitchitt & Benedict

Many businesses operate with little or no planning. Many are under-capitalized and are running short of working capital. They lack adequate financing in either the short term or the long term.

The real problem is they have not invested the time to decide how the business will be run. They need to as themselves a few key questions: What kind of financing is necessary with this level of sales? Can we sustain the company with our existing line of credit? When will the cash flow “flow” ?

All of these questions and problems are manageable. However, seeing the issue early is the key. The preparation of a financial plan, including an income statement, cash flow and balance sheet can highlight potential problems early on. With advanced knowledge, management can explore and determine the best solution.

Many businesses do not know where to start in the planning process. They believe they will take on every opportunity that comes their way and make what money they can. However, this type of management weakens a company. They tend to operate in a crisis mode, putting out each fire as it comes up.

At Fitchitt & Benedict, we try to break the process out into manageable steps:

We start with the numbers, developing sales figures, then determining what costs are associated with these sales.

Next we address the need for new equipment in order to obtain the projected sales levels. At this time we can work with the timing of sales, sales terms and cash flow management.

Then we expand into marketing plans, which will get us to the desired sales levels, etc.

Taking it one step at a time and giving adequate consideration to each component will result in a fine-tuned business plan. In most cases the plan ends up as a “to do” list with corresponding financial numbers to show the expected results. Spending more time to develop a written plan can be a waste of time. A list can keep us focused on the real issues, rather than wording. From the list, we can easily review the company’s performance from month to month and determine what needs to be adjusted. It is much easier to manage one month at a time and adjust the operations to obtain the desired long-term results.

Business plans not only provide a road map for the operations, they also give you the outline of the cash flow highs and lows. Having adequate financing available when you need it is a real challenge. A business plan can show you when and how much money you will need, as well as demonstrate to a banker how you intend to repay a loan or line of credit. Here is where the advance warning can have a significant impact. Going to the bank ahead of time rather than in a crisis mode shows great management skills and organization. Thus, a banker will be more apt to invest in your management skills and in your company. Having a well-defined business plan lays the foundation for a very successful and profitable company!

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	Many businesses operate with little or no planning. Many are under-capitalized and are running short of working capital. They lack adequate financing in either the short term or the long term. The real problem is they have not invested the time to decide how the business will be run. They need to as themselves a few key questions: What kind of financing is necessary with this level of sales? Can we sustain the company with our existing line of credit? When will the cash flow “flow” ? All of these questions and problems are manageable. However, seeing the issue early is the key. The preparation of a financial plan, including an income statement, cash flow and balance sheet can highlight potential problems early on. With advanced knowledge, management can explore and determine the best solution. Many businesses do not know where to start in the planning process. They believe they will take on every opportunity that comes their way and make what money they can. However, this type of management weakens a company. They tend to operate in a crisis mode, putting out each fire as it comes up. At Fitchitt & Benedict, we try to break the process out into manageable steps: > We start with the numbers, developing sales figures, then determining what costs are associated with these sales. > Next we address the need for new equipment in order to obtain the projected sales levels. At this time we can work with the timing of sales, sales terms and cash flow management. > Then we expand into marketing plans, which will get us to the desired sales levels, etc. Taking it one step at a time and giving adequate consideration to each component will result in a fine-tuned business plan. In most cases the plan ends up as a “to do” list with corresponding financial numbers to show the expected results. Spending more time to develop a written plan can be a waste of time. A list can keep us focused on the real issues, rather than wording. From the list, we can easily review the company’s performance from month to month and determine what needs to be adjusted. It is much easier to manage one month at a time and adjust the operations to obtain the desired long-term results. Business plans not only provide a road map for the operations, they also give you the outline of the cash flow highs and lows. Having adequate financing available when you need it is a real challenge. A business plan can show you when and how much money you will need, as well as demonstrate to a banker how you intend to repay a loan or line of credit. Here is where the advance warning can have a significant impact. Going to the bank ahead of time rather than in a crisis mode shows great management skills and organization. Thus, a banker will be more apt to invest in your management skills and in your company. Having a well-defined business plan lays the foundation for a very successful and profitable company!
	Fitchitt & Benedict, CPAs 1519 West Valley Hwy North, Suite 201, Auburn, WA 98001 Phone 253 833-5304 Fax 253 833-0175 ©2005 Fitchitt & Benedict, CPAs. All rights reserved.