1. business and industrial

Slide 1 Developing Your Business Plan An Online Business Educational Series from the Maine Small Business Development Centers Dedicated to helping Maine small business succeed. We are the Maine SBDC. Slide 2 According to the U.S. Department of Commerce, only 1 in 5 businesses are still in business after 5 years, about 70% fail within the first year. Much of this is attributed to lack of planning. For the startup business or existing business looking to grow, there is no other option but a well defined plan. This workshop is intended to show you the basics of the business plan and answer the following questions: What is a business plan? Why is it important? And How do you put one together? Slide 3 A business plan is a written document that should examine your business’ proposed products, the market, the industry, the management, marketing policies, production and financial needs. All businesses should have a business plan, but particularly those who are starting or buying a business, financing or refinancing an existing business, or raising debt or equity capital. If you are starting a business, the process of building your plan will focus your mind on how your new business will need to operate to give it the best chance of success. In summary, Your business plan is a statement of intent. It should provide details of how you are going to develop your business, when you are going to do it, who’s going to play a part and how you will manage the money. Remember, planning is a map to success in today’s business world and the business plan is an important part of the planning process. Slide 4 Tendency to simplify the process. Put together the idea, add financials and run to the bank. A distinction should be made between the Business Plan and the business planning process. Business Planning is about the process! Slide 5 The process of putting a business plan together, and the thought you put into writing it, forces you to take an objective, critical, unemotional look at your entire business project. Thus, the business plan becomes a tool small business owners can utilize for management and planning purposes. Keep in mind that a business plan is a living document that will need updating and changing as your business grows. The business plan can also help you… determine if you are ready to go into business Identify areas of weakness and strength structure the financial side of your business efficiently focus your development efforts and work as a measure of your success. Think of the business plan as a map for you to follow that will help you achieve your business goals and objectives. A sound business plan will help build your business, weather market fluctuations, manage sudden growth, and prepare for changing business conditions The business plan’s use as an effective planning tool cannot be overlooked. Remember, lack of planning is why over half of all new businesses fail in the first five years. Slide 6 Business plans are also used externally to convince outsiders such as banks or venture capitalists to invest money into your business. This is important, as potential investors may invest in your idea and work with you as a result of the strength of your plan. The following people or institutions may request to see your business plan at some stage: Banks External investors‐ such as a friend, a venture capitalist firm, or a business angel Grant providers Anyone interested in buying your business AND Potential senior partners Thus, the business plan is important externally because it can be used as a communication tool that encourages loans and promotes growth…without this type of written document it would be extremely difficult to convince potential investors to loan you money. Regardless of whether you intend to use your plan internally, or as a document for people outside of your business, it should still take an objective and honest look at your business. Failing to do this could mean that you and others have unrealistic expectations of what can be achieved and by when. Slide 7 Business plans vary depending on many different factors, such as the size of your business, the type of product or service you offer, and the type of industry you’re in, to name a few. There are no rules in regards to the content you use, the format, or the length of the business plan. However, there are particular guidelines in place, particularly in regards to the content of the business plan. We have put together 10 essential parts we feel every plan should include: An Executive summary A short description of the business Your Management team and personnel Your Operations A Market and Industry Analysis Your Marketing and Sales Strategy A short description of the Competition Sources and uses of funds Summary Financial forecasts It is important to note that a lot of the information required for your business plan will be the same information you used to put together your marketing plan. Let’s begin with the executive summary… Slide 8 The Executive Summary is an overview of your business and it is often the most important part of your business plan. Positioned at the front of your business plan, it is the first part to be read. However, because it is a summary it is recommended that you write your Executive summary last. The Executive Summary is synopsis of the key points of your entire plan. It should include highlights from each section of the rest of the document, from the business description to the elements of the financial forecasts. Be sure not to restate the details of the plan. Also, make sure you include the amount of money you are requesting to borrow, how you will repay the loan, and how long you want the loan to last. Because banks, venture capitalists, and other funding sources are usually faced with large piles of funding requests, they have been known to separate business plans into “worth considering” and “discard” piles based on this section alone. So it is important that you make sure your summary is concise (no longer than two pages) and interesting. If, after reading the executive summary, an investor understands what your business is about and wants to know more, it has done its job. Now let’s move on to the second section of the Business plan…the business description… Slide 9 The next part of the business plan is the business description. Here you must be able to clearly convey who you are, what you do, what you have to offer, and the market you want to target. Start with an overview of your business, including the following information: When you started or intend to start your business What type of business you have and what market you are in The current legal structure AND Your vision for the future Next, describe your products or services as simply as possible: what makes it different what benefits it offers why customers would want it and how you plan to develop your product or service Be sure not to include too much jargon so people not familiar with your business will understand what they are reading. Next, the Management and Employees section… Slide 10 Your business plan should include a short, but detailed description of the business’s management team and staff. Some basic information to include: How many departments, managers, and employees are needed to run the business (Here it is a good idea to develop an organizational chart and attach it as an appendix to the plan). Be sure to include a paragraph on each individual manager, outlining their background and relevant experience. This won’t be necessary for each staff member. How and where will you find employees, and how will you keep them What are the costs associated with your employees: How much will you pay them? What are their benefits? And will there be employee training costs? You also may want to include any resources available from outside the business, such as an accountant or lawyer. You should also identify the strengths in your team and how you plan to deal with any weaknesses. The strength of your management team may improve your chances of obtaining external funding. So it is important that your plan demonstrates that your team has the right balance of skills, drive and experience to help your business succeed.. Now let’s move on to the operations and location section of the business plan… Slide 11 Your business plan should identify your business location, its operational capabilities and structure, and whether or not your business needs suppliers or other companies to complete your product or service. First the business location. Be sure to address the following areas: What space does your business need? Why is the area and location desirable? Do you own or rent the property? What are your long‐term commitments to the property? Is it easily accessible? Are you located near customers and suppliers? Do you have easy access to major highways, railways, and airports? Next, business operations and capabilities: Describe how your product will be produced and sold? How will your services be rendered? What months, days, and hours will your business be open? Is your business seasonal? What furniture, fixtures, equipment and machinery is needed, and will it be bought, leased, or rented? What is the capacity compared with forecasted demand? And finally, include information on your business’s suppliers: What and how much do you need from suppliers? Who are they? Where will you get these products or services? How much will they cost? You may also want to include information technology (IT) data in this section of the plan. IT is a key factor in most businesses today. Be sure to outline the reliability and the planned development of your systems, and include your strengths and weaknesses in this area. Next…the industry and market analysis… Slide 12 The Market and Industry analysis is a short summary of what is currently happening in your particular industry and local market. This section does not have to be very detailed, and should just touch upon some of the highlights in your industry, including what is new and exciting what opportunities exist What are the latest trends And what the future holds You may also want to include information on your local market place, such as the strength of the local and state economy, consumer spending forecasts, unemployment rates, and other relevant economic indicators. It is important to demonstrate that you’re fully aware of the marketplace you’re planning to operate in and that you understand any important trends and drivers. If you anticipate changes in the market, be sure to state how you expect your business to react to them. Now let’s move on to the Marketing Strategy section… Slide 13 Your Marketing Strategy should describe the specific activities you intend to use to promote and sell your products and services. This should include how you will go about getting the product or service to the customer, as well as any specific goals or objectives you may have. You will need to provide answers to the following questions: Who are your customers? It is crucial to know who is most likely to use your product or service. This will allow you to segment the market, which will help you identify which segments will be most profitable. Remember, if you don’t know who your customers are, chances are they won’t know you. What is your pricing policy? Determining the right price for you product or service can be a delicate matter, and will be affected by the quality of your product or service, customer demand, and the competition. How you will promote your product or service? Here you want to identify your sales methods and what specific mix of advertising, personal selling, sales promotion, and public relations you will use to disseminate information about your product, brand, or service. Be sure to include what mediums you will use to advertise your product or service…such as T.V., radio, newspapers, or a website. It is important to have a clear idea of how you will get your product or service to the customer. It’s often the weak link in business plans so it’s worth spending time on to make sure it’s both realistic and achievable. Slide 14 Today, smart business owner’s not only know their competitors, but learn form them. By knowing what your competitors are offering customers, you can try to do better. A competitive analysis can help you understand the competition and one should be performed for each competitor. Each analysis should show how your business is better and different. Include factors such as quality, service, price/value, creativity, flexibility, prestige, knowledge and innovations. Your analysis should also show ways in which your business is the same as the competitors; the strengths and weaknesses of your competitors, and the pricing differences between you and them. And finally, the analysis should include ways your competitors promote their business. Include advertisements, events, sales, web sites, and anything else they use. A short paragraph for each competitor should be included in the plan, which displays the competitor’s name, location, and competitive analysis. You may also want to include some what‐if scenarios that show how your business would deal with customers’ changing needs or any other market changes. Slide 15 The Business Plan should include a section stating both the business’s sources and uses of funds. Here you want to identify proposed sources of funds, including owner’s cash injection, proposed bank financing, and funds from any other sources. You also want to state how these funds will be used Identify the items to be purchased with these funds, such as inventory, production equipment, office supplies, or other start‐up expenses. Also include current contractor and supplier estimates, as well as installation, freight, and contingency costs. Slide 16 The summary is the last section of the business plan, except for the financial statements. This section is fairly self explanatory. It can be very brief, maybe only 1 to 2 paragraphs, and can be used to re‐
emphasize some of the main goals of the business plan. Don’t be afraid to express confidence in your projections and business goals. Slide 17 In review, a business plan is a written document that should examine your business’ proposed products, management policies, marketing policies, production needs and financial needs, as well as discuss the business’ proposed market and industry. We talked about how a business plan can be used externally to secure funding and promote growth, as well as it’s uses internally where it serves as a map for your business, helping you achieve your business goals and objectives. We also discussed how a business plan is a living document that will need updating and changing as your business grows. Next we reviewed each section of a business plan: The Executive summary The Business Description the Management team and personnel the Operations the Market and Industry Analysis the Marketing and Sales Strategy the description of the Competition The Sources and uses of funds The Summary AND 10. The Financial forecasts It is a good idea to get someone who is not involved in your business, such as a family member or friend, to read this section of your plan to make sure they can understand it. This concludes Part 1 of the Business Plan module, click on the link to continue to Part 2, Business Plan Financials. The Cycle‐Rama business plan, including all financial statements can be downloaded from our website at www.mainesbdc.org. Click on Online Workshops in the left menu. It might be beneficial for you to download the statements and print them before beginning Part 2. Slide 1 The Business Plan Financials An Online Business Educational Series from the Maine Small Business Development Centers Dedicated to helping Maine small business succeed. We are the Maine SBDC. Slide 2 Slide 3 For your business, the cash flow statement may be the most important financial statement you prepare. It traces the flow of funds (or working capital) into and out of your business during a particular time period. For a small business, a cash flow statement should probably be prepared as frequently as possible. This means either monthly or quarterly. An annual statement is a must for any business. Cash flow is determined by looking at three components by which cash enters and leaves a company: core operations, investing and financing. First, core operations…Measuring the cash inflows and outflows caused by core business operations, the operations component of cash flow reflects how much cash is generated from a company's products or services. Generally, changes made in cash, accounts receivable, depreciation, inventory and accounts payable are reflected in cash from operations. Second, investing…Changes in equipment, assets or investments relate to cash from investing. Usually cash changes from investing are a "cash out" item, because cash is used to buy new equipment, buildings or short‐term assets. However, when a company divests of an asset, the transaction is considered "cash in" for calculating cash from investing. And third, financing…Changes in debt or loans are accounted for in cash from financing. Changes in cash from financing are "cash in" when capital is raised, and they're "cash out" when it is repaid. Thus, if a company takes a loan from a bank, the company receives cash financing. However, when interest is paid to the bank, the company is reducing its cash. Now let’s discuss who uses the cash flow statement and why its important… . Slide 4 As an analytical tool the statement of cash flows is useful in determining the short‐term viability of a company, particularly its ability to pay bills. Cash flow statements are particularly important for start‐up companies with limited liquid assets. These companies are vulnerable to devastating cash shortages, even when Accounts Receivable balances point to long‐term financial health. There are a few different groups of people that are interested in cash flow statements including accounting personnel, lenders and creditors, potential investors, and potential employees and contractors. Accounting personnel need to know whether the organization will be able to cover payroll and other immediate expenses. Potential lenders and creditors want a clear picture of a company’s ability to repay debt. Potential investors need to judge whether the company is financially sound…and lastly, potential employees and contractors need to know whether the company will be able to afford compensation. As you can see, the cash flow statement is a very important document. Some people tend to focus on the Income Statement which shows whether or not the business made a profit. However, cash flow can be more important than a profit on the Income Statement. A business may be profitable at the end of the year, but if you don’t have cash when you need it your business won’t survive. Now let’s review a Cash Flow Analysis we put together for our Pseudo‐business called Cycle‐Rama. . Slide 5 Now we will show you how to actually put a Cash Flow Statement together by walking you through the steps we took to prepare the cash flow statement for our pseudo‐business called Cycle‐Rama. A snap shot of our cash flow statement is displayed so you can follow along. Before you begin you need to estimate sales on a monthly basis. Sales from previous years can be used to forecast sales for the coming year. We’ll start with the second column labeled “Pre‐Start,” and discuss the various cash inflows and outflows for this period. This column is utilized because Cycle‐Rama is a new business that plans to open in April of 2005. It’s pre‐start cash on hand is $25,000…this is the money that the owner’s of Cycle‐
Rama are personally investing in the business. Next there are three sources of cash receipts, “cash sales,” “service income” and Loans/other. Cash sales and service income for the pre‐start period are both 0 because the business has not started operations yet. However, Cycle‐Rama has received a loan of $80,000…giving them total cash receipts of $80,000. Combining their cash on hand with total cash receipts, we can see that there total cash available is $105,000. Now that we have reviewed the business’ cash inflows we can move on to cash outflows, or cash paid out. In the first column, under cash paid out, you will see a list of expenses common to most businesses, from purchases, to gross wages, and moving all the way down the list to Loan Interest payment. Since Cycle‐Rama is a new business yet to commence operations they have only incurred four expenses. They used $80.000 to purchase inventory and equipment, $1,000 to purchase office and operating supplies, $200 to pay for telephone costs and $300 to pay for utility expenses. Adding up all of the cash paid out gives us a subtotal of $81,500…but we must consider other expenses to compute the business’ total cash paid out. As we can see, Cycle‐Rama’s only expense in this section is the $12,000 under other start‐
up costs. The other start‐up costs category could be a variety of things, but Cycle‐Rama used this money to renovate the building in which they will operate. Thus, the total cash paid out is $93,500. Subtracting this number from Cycle‐Rama’s Total Cash Available, gives them a Cash Position of $11,500. This cash position now becomes the Cash On Hand for the next month…in this case cycle‐rama will have a cash position of 11,500 starting April 1, 2005. Before we review the cash inflows of outflows for the month of April, it is important to note that we used a spreadsheet to calculate the principal and interest payments on our loan of $80,000. This is located in the bottom section of our Cash Flow Statement titled Total Debt. As you can see no principal or interest is due at this point, but we will have to start making payments in April. Moving on…as we discussed we begin April with cash on hand of $11,500. Next, since we have commenced operations, we have forecasted cash sales of $31,572 and service income of $3,919. Since we did not take out another loan or receive any other funding we have total cash receipts of $35,491. Combining our cash on hand and our total cash receipts gives us total cash available of $46,991. Now we must subtract out our expenses. Starting with purchases of $21,785, and moving down the list from gross wages of $2,000 all the way down to the loan interest payment of $700, we calculate a subtotal of cash outflows of $32,285. Note that we calculated the loan interest payment using our spreadsheet at the bottom of the page…interest is $700 and the principal payment on our loan for the month of April is $1,020 The loan principal payment of $1,020 which is our only expense for the last section of cash outflows. There are no capital purchases, other start‐up costs, other withdrawals, or an owner’s withdrawal. But getting back to April, we see that our total cash paid out for April is $33,304. Subtracting this number from our Total Cash Available gives us a cash position of $13,687. Now our cash position for April becomes our cash on hand for May. This process repeats itself each month for the rest of the year. It is important to note that the owners of Cycle‐Rama have decided not to take any money out of the business for themselves until sales start to pick up in June. You can see that the owner’s withdrawal in June is $1,000. Please download our complete Cash Flow Statement from our website at www.mainesbdc.org, and don’t hesitate to contact your state affiliated Small Business Development Center, as qualified business counselors are there to assist you with difficult financial statements like the Cash Flow Statement. Slide 6 The income statement, also known as the profit and loss statement, is an accounting of income and expenses that indicates a firm's net profit or loss over a certain period of time, usually one or two years. This statement indicates how net revenue, which is money received from the sale of products and services before expenses are taken out, also known as the “top line,” is transformed into Net Income, the result after all revenues and expenses have been accounted for, also known as the “bottom line.” What is it used for? Well, most importantly, it is used to show managers and investors whether the company made or lost money during the period being reported. It can also be used to evaluate the past performance of the company, predict future performance, and assess the risk associated with achieving future cash flows. The income statement also has certain limitations. For example, items that might be relevant but cannot be reliably measured are not reported, such as brand recognition and loyalty. Also, some numbers depend on judgments and estimates, such as how depreciation expense depends on estimated useful life and salvage value. Let’s take a look at Cycle‐Rama’s Income Statement.… Slide 7 Cycle‐Rama has put together a projected income statement two years out because they are a new business. If you are an existing business you would use actual as opposed to projected data to formulate your income statement. As you can see Cycle‐Rama expects to generate $338,662 in sales in year 1, as well as $47,025 of service income. These numbers can be taken directly from the Cash Flow Statement we just reviewed. Next we subtract out our cost of goods sold of $233,677 to give us a Gross Profit of $152,010, also known as the Top Line. To determine the cost of goods sold we again refer to the cash flow statement and subtract our beginning inventory from our total purchases for the year. By doing this we account for only the costs associated with the products that were sold. Moving on to operating expenses we can again refer to the cash flow statement for a list of our total expenses throughout the year. Adding all of these expenses up gives us a total expense of $86,594. Subtracting our total expenses from the gross profit gives Cycle‐Rama a net profit before taxes of $65,416, also known as the bottom line. Next we’ll discuss the Break‐Even Analysis. Slide 8 Break‐even analysis is a technique widely used by production management and management accountants. It is based on categorizing production costs between those which are "variable" (costs that change when the production output changes) and those that are "fixed" (costs not directly related to the volume of production). Total variable and fixed costs are compared with sales revenue in order to determine the level of sales volume, sales value or production at which the business makes neither a profit nor a loss, which is known as the "break‐even point". A break even point is typically calculated in order for businesses to determine if it would be profitable to sell a proposed product, as opposed to attempting to modify an existing product. It can also be used to analyze the potential profitability of an expenditure in a sales‐based business. Now Let’s look at a graphical representation of the break‐even point. Slide 9 As you can see, this graphical representation of the break even point deciphers between fixed and variable costs. Your fixed costs are expenses whose total does not change in proportion to the activity of a business. Rent, insurance, and utility bills are all examples of fixed costs. Variable costs, on the other hand, are expenses that change in proportion to the activity of a business. Variable costs include the wages of production workers or salespeople, raw materials, electric power to run machines, and the cost of maintaining inventory. Fixed and variable costs make up the total cost to run your business. As you can see from this graph, the break‐even point is the point in which your income is equal to your costs. Thus, you are not making a profit nor incurring a loss. However, when you are operating above the break even point, labeled P, income is great than cost, which means you are earning a profit. When you are operating below the break even point, your costs are greater than income, which means you are sustaining a loss. Now let’s take a look at how Cycle‐Rama computed their Break Even Point in sales dollars. Slide 10 Here we demonstrate how Cycle‐Rama computed their Break‐Even point in sales dollars for their first year of operation, April 1, 2005 to March 31, 2006. This analysis is based on projected sales of $385,687. To determine the break‐even point in sales dollars you divide your fixed costs by 1 minus your variable costs. For this information we can refer to the income statement that we just reviewed. First let’s address the bottom of the equation, 1 minus variable costs. To determine Cycle‐Rama’s variable costs we divide our cost of goods sold by total sales, which is composed of both sales and service income. Dividing cost of goods sold, $233,677, by total sales, $385,687, gives us a variable cost of 61%. Now addressing the top of the equation, Cycle‐Rama’s fixed costs, also found on the income statement, are $86,594. Plugging our numbers into the equation gives us a break‐even point in sales of $222,035. This is the point in which the bike shop will earn neither a profit nor a loss. Anything above the break‐even point will be profit, while anything below this point will be a loss. Now let’s move on to the balance sheet… Slide 11 A balance sheet is a snapshot of a business’ financial condition at a specific moment in time, usually at the close of an accounting period. A modern balance sheet usually has three parts: assets, liabilities, and owners’ or stockholders’ equity. At any given time, assets must equal liabilities plus owners’ equity. An asset is anything the business owns that has monetary value. Liabilities, on the other hand, are the claims of creditors against the assets of the business. A balance sheet helps a small business owner quickly get a handle on the financial strength and capabilities of the business. It can help answer the following questions: is the business in a position to expand? Can the business easily handle the normal financial ebbs and flows of revenues and expenses? Or should the business take immediate steps to bolster cash reserves? Balance sheets can also identify and analyze trends, particularly in the area of receivables and payables. For example, is the receivables cycle lengthening? Can receivables be collected more aggressively? Is some debt un‐collectable? Has the business been slowing down payables to forestall an inevitable cash shortage? Balance sheets, along with income statements, are the most basic elements in providing financial reporting to potential lenders such as banks, investors, and vendors who are considering how much credit to grant the firm. Let’s take a look at Cycle‐Rama’s balance sheet… Slide 12 As we just discussed a modern balance sheet usually has three main parts, assets, liabilities, and owners’ or stockholders’ equity… and assets must equal liabilities plus owners’ equity. Here we see Cycle Rama’s balance sheet as of April 1, 2005. We can use information from Cycle‐Rama’s Cash Flow Statement to help put together our Balance Sheet. First let’s calculate Total Assets. We know that the owner’s have contributed $25,000 of their own money into the business on top of the $80,000 loan they received from the bank. This gives us Total Assets of $105,000…but we must separate the assets into current and fixed assets and identify where the money was invested. So under Current Assets we have cash of $11,500, this is the amount left over after all the other assets were purchased, such as inventory, supplies, etc. If you look at the Cash Flow Statement, you will see that $11,500 is the Cash on Hand as of April 1, 2005. Next we have pre‐paid expense of $500. Again referring to the cash flow statement we find pre‐paid expenses during the pre‐
start period of $500…$200 for telephone and $300 for utilities. Next we have inventory of $78,000. On the Cash Flow Statement under cash paid out for the pre‐start period, we see purchases of $80,000. $78,000 was used to purchases inventory, which is a current asset, and the remaining $2,000 was used to purchases equipment, a fixed asset which we will discuss next. And our last current asset is supplies… reviewing the cash flow statement we see $1,000 was used to purchase supplies during the pre‐start period. Now adding up all of our Current Assets gives us Total Current Assets of $91,000. Now let’s review the bike shop’s Fixed Assets. As we just pointed out, $2,000 of the $80,000 for purchases was invested in equipment. Next we have Building Renovations worth $12,000…again refer to the Cash Flow statement and under “other start‐up costs” for the pre‐start period you will see the $12,000 used to renovate the building. Thus, we have Total Fixed Assets of $14,000. Combining our Total Current Assets with our Total Fixed Assets gives us Total Assets of $105,000. Now we’ll review cycle‐rama’s liabilities and owner’s equity…which when combined, should equal our total assets of $105,000. First, under Current Liabilities, we have the current position of long‐term debt, which is $12,200. Reviewing the Cash Flow statement we find that the total loan principal payment for the year is $12,200. This is the amount of principal Cycle‐Rama will have to pay for the year on their $80,000 bank loan. This gives us total current liabilities of $12,200. Next, under Long‐Term Liabilities, we have the Term Loan of $67,800. This is the remaining principal balance of the $80,000 loan after year 1 principal is paid. Thus, adding together the Total Current Liabilities and the Total Long‐Term Liabilities gives us Total Liabilities of $80,000. Now we must factor in the Owner’s Equity. When we do this, adding the owner’s equity of $25,000 to the Total liabilities of $80,000 gives us Total Liabilities and Net Worth of $105,000. As you can now see Total Assets equal Total Liabilities and Net Worth. As we mentioned before, some of this information may be difficult to understand…but that is why your state affiliated Small Business Development Center counselors stand ready to assist you. So please don’t hesitate to contact us. Slide 13 The financial section of the business plan should include a Cash Flow Analysis, Income Statement, Break‐
Even Analysis, and a Balance Sheet. Cash flow is determined by looking at three components by which cash enters and leaves a company: core operations, investing and financing. It is used to determine a business’ short‐term viability, particularly it’s ability to pay bills. The income statement is used to show managers and investors whether the company made or lost money during the period being reported. The Break‐Even analysis displays the point in which a business makes neither a profit nor a loss. And finally, the balance sheet…this is a snapshot of a business’ financial condition at a specific moment in time, and usually has three parts: assets, liabilities, and owners’ or stockholders’ equity. This concludes the Business Plan module, don’t forget that all material covered in this workshop is available at www.mainesbdc.org. You can review and print the module’s support material, which includes the module’s transcripts, as well as the sample business plan we created for Cycle‐Rama.