Small Business Finance Management

Name: Small Business Finance Management
Author: William Smith

Learn how you can manage a small business’s finances.

Preview the first lesson free — get full access to all 4 lessons.

Course: On-Demand

How do you manage the finances of a small business? Let's explore forecasting revenue and cashflow, key concepts that enable businesses to remain competitive. We'll also explore how small businesses can engage customers, when to consider equity financing, and how to estimate your own financial needs. Forecasting revenue is crucial for the small business, especially in the early existence phase when there is a lack of records available to help in forecasting. the forecasting revenue process actually begins before the budget process does. This is because you forecast how much revenue and expenses you anticipate the business will have before you plan how much to allocate across the business. The first step in developing a revenue forecast is to determine what type of forecast you would like to use. There are two main types of forecasting, judgment and quantitative. In judgment forecasting, the owner will determine what revenue streams they will receive and what their expected amount of revenue will be from each. This is a little more difficult to accomplish because everyone has a different vision on how much revenue they think that they will receive and where it will come from. In quantitative based revenue forecasting, the revenue is based on data that's either taken from recent business records from similar businesses or records from years of collected historical data. The business owner can also combine the two types of forecasting revenue for a mixed method approach. In this method, the quantitative data from previous years or records is combined with the owners judgment and intuition about the business's chances of proceeding down the previous revenue and expense tracks. With this method, the business owner can apply the information that they've learned to gauge if the historical data of the past will increase, decrease, or remain the same. Once the forecast has been established, it's a living document that needs to be updated as each month passes to establish trends that will make future forecasting more reliable. Cashflow forecasting is very similar to forecasting revenue, except that it's more specific regarding the projected revenue and expenditures over a specified time period. Each revenue stream or cash inflow is carefully examined along with the projected cash outflow to make a determination as to how much profit will be generated for a month or what the monthly business expenses will be. Cashflow forecasting helps business owners predict cashflow for future months and aid them in determining whether the business is generating positive or negative cashflow each month.

Beginner Provider : William Smith 4 Lessons · 10m in Arabic, German, English, Spanish, French, Portuguese, Chinese

Course Description

These lessons explore how companies manage their finances and demonstrate how both revenue and cash flow forecasts enable businesses to remain competitive and in business. These lessons discuss how revenue and cash flow forecasts better prepare a business to manage the resources it needs for opening or expanding a business. Finally, the lessons also explore how customer engagement can level the playing field for a business against its bigger competitors.

What You'll Learn

Apply different types of financial forecasting, including revenue and cash flow forecasts
Identify the factors that promote customer engagement
Distinguish between debt and equity financing, and recognize when to consider equity financing
Estimate the financial needs for opening or expanding a business
Use forecasts to manage the resources a business needs to remain competitive

Key Takeaways

Revenue and cash flow forecasts help businesses remain competitive and stay in business.
Forecasting better prepares a business to manage the resources it needs when opening or expanding.
Customer engagement can level the playing field for a business against its bigger competitors.
Understanding the difference between debt and equity financing supports sound financing decisions.
Estimating financial needs is part of managing a company's finances effectively.

Frequently Asked Questions

What does this course cover?

It explores how companies manage their finances, including financial forecasting of revenue and cash flow, promoting customer engagement, when to consider equity financing, and estimating your financial needs.

What will I learn about financing?

You will learn how to distinguish between debt and equity financing and when to consider equity financing.

How can this course help a smaller business compete?

The lessons explore how customer engagement can level the playing field for a business against its bigger competitors.

Is this course useful for opening or expanding a business?

Yes. The lessons discuss how revenue and cash flow forecasts better prepare a business to manage the resources it needs for opening or expanding a business.

What topics are included in the lessons?

The lessons are Forecasting Revenue and Cash Flow, Promote Customer Engagement, When to Consider Equity Financing, and Estimating Your Financial Needs.