Entrepreneurial Finance: Fundamentals of Financial Planning and Management for Small Business

Featuring key topics within finance, small business management, and entrepreneurship to develop and maintain prosperous business venturesWith a comprehensive and organized approach to fundamental financial theories, tools, and management techniques, Entrepreneurial Finance: Fundamentals of Financial Planning and Management for Small Business equips readers with the necessary fundamental knowledge and advanced skills to succeed in small firm and business settings. With a unique combination of topics from finance, small business management, and entrepreneurship, the book prepares readers for the challenges of today’s economy.Entrepreneurial Finance: Fundamentals of Financial Planning and Management for Small Business begins with key concepts of small business management and entrepreneurship, including management tools and techniques needed to establish, run, and lead business ventures. The book then delves into how small businesses are operated, managed, and controlled. General finance skills and methods are integrated throughout, and the book also features:Numerous practical examples and scenarios that provide a real–world perspective on entrepreneurship and small business managementA brief summary, list of key concepts, and ten discussion questions at the end of each chapter to prepare readers for the challenges of today?s economyA practical guide to the complete life of a small business, from establishing a new venture to training and developing young entrepreneurs tasked with maintaining and developing a prosperous economyAn in–depth discussion of the entire process of writing a successful business plan, including the rationale, significance, and requirementsTechniques needed to solidify the free enterprise tradition, develop entrepreneurial strategies, and grow small businessesEntrepreneurial Finance: Fundamentals of Financial Planning and Management for Small Business is an ideal textbook for upper–undergraduate and first–year graduate courses in entrepreneurial finance within business, economics, management science, and public administration departments. The book is also useful for MBA–level courses as well as for business and management PhD majors as a resource in methodology. The book is also an idea reference for entrepreneurs, business managers, market analysts, and decision makers who require information about the theoretical and quantitative aspects of entrepreneurial finance. INDICE: PREFACE xvii.PART I ENTREPRENEURIAL PERSPECTIVE.CHAPTER 1 SMALL BUSINESS AND THE ENTREPRENEUR 3.1.1 What is Entrepreneurial Finance? 3.1.2 Significance of the Small Business 5.1.3 Entrepreneurship and the Entrepreneur 9.1.4 The Idea and the Opportunity 12.Sources of New Business Ideas 14.1.5 From an Idea to Reality 16.Stage I: Development, Start Up, and Early Growth 16.Stage II: Increasing Growth and Maturity 18.1.6 Summary 18.Key Concepts 18.Discussion Questions 19.CHAPTER 2 SMALL BUSINESS OPTIONS 20.2.1 Starting a New Business 20.Advantages and Disadvantages of Starting from Scratch 21.Important Steps for the Right Start 21.2.2 Buying an Existing Business 22.Advantages 22.Disadvantages 23.Due Diligence 23.2.3 Purchase Options 24.Buy–Out Option 24.Buy–In Option 25.Bulk–Asset Buying Option 25.Take–Over Option 25.The Final Steps in the Buying Process 25.2.4 Franchise 26.Types of Franchise 27.Advantages and Disadvantages of the Franchise Option 28.The Legal Aspect of Franchising 30.2.5 Home Business and Family Business 30.2.6 Summary 34.Key Concepts 34.Discussion Questions 34.CHAPTER 3 SMALL BUSINESS PURCHASE PRICE 36.3.1 Asset–Based Value 36.3.2 Cash Flow Based Value 39.3.3 Market–Based Value 40.3.4 Capitalized Earnings Based Value 41.3.5 Financial Ratios Based Value 43.3.6 Summary 44.Key Concepts 45.Discussion Questions 45.PART II ENTREPRENEURIAL ORGANIZATION.CHAPTER 4 FORMS OF BUSINESS OWNERSHIP 49.4.1 Sole Proprietorship 49.Advantages of Sole Proprietorship 49.Disadvantages of Sole Proprietorship 50.4.2 Partnership 50.Partners Rights 51.Partners Responsibilities 51.Types of Partnership 52.Types of Partners 52.Advantages of Partnership 53.Disadvantages of Partnership 53.4.3 Corporation 54.Justifications for the Creation of Corporations 55.Organizational Structure and Management of Corporations 55.S–Corporation 56.Advantages of Corporation 57.Disadvantages of Corporation 58.4.4 Other Forms of Business Ownership 58.Limited Liability Company (LLC) 58.Professional Service Corporation (PSC) 60.Joint Venture (JV) 60.Non–Profit Corporation (NPC) 60.Cooperatives 60.4.5 Summary 62.Key Concepts 62.Discussion Questions 63.CHAPTER 5 THE BUSINESS PLAN 64.5.1 What is a Business Plan? 64.Types of Business Plan 64.Importance and Rationale 65.5.2 Contents of the Plan 66.Title Page 67.Confidentiality Statement 67.Table of Contents 67.Executive Summary 68.Vision, Mission, and Elevator Pitch 68.Business Description 69.Background 69.Product 70.Market 70.Functional Plans 70.Operational Plan 71.Management Plan 71.Marketing Plan 71.Financial Plan 73.Appendix 75.5.3 Other Elements of the Plan 76.Milestone Chart 76.SWOT Analysis 76.Critical Risks 77.Measures of Control 78.Succession Plan 78.Environmental Impact 78.5.4 Reviewing the Plan 79.5.5 Anticipating and Preparing Responses to Potential Risks 82.5.6 Financing the Plan 83.Venture Capitalists 83.Angel Investors 84.5.7 Presenting the Plan 84.5.8 Updating the Plan 86.5.9 Grooming the Plan 86.The Written Text 87.The PowerPoint Slides 87.5.10 Summary 88.Key Concepts 88.Discussion Questions 89.PART III ENTREPRENEURIAL FINANCE AND VALUATION.CHAPTER 6 FINANCIAL STATEMENTS AND THEIR ANALYSIS 93.6.1 The Balance Sheet 93.Components of the Balance Sheet 94.Balances of the Balance Sheet 96.The Cash Flow Cycle 96.6.2 Income Expenses Statement 97.6.3 Financial Statement Analysis 99.Vertical Analysis 100.Horizontal Analysis 101.6.4 Ratio Analysis 102.Profitability Ratios 102.Market–Based Ratios 105.Operational Ratios 109.Liquidity Ratios 111.Debt Ratios 113.6.5 The DuPont Model 115.A Final Word About Ratios 117.6.6 Summary 117.Key Concepts 118.Discussion Questions 118.CHAPTER 7 CAPITAL STRUCTURE AND LEVERAGE 120.7.1 Debt and Equity Capital 120.Debt Capital 120.Equity Capital 121.Debt versus Equity Financing 122.7.2 The Optimal Capital Structure 125.The Traditional Approach 125.The Modigliani Miller Approach 130.Other Approaches to Capital Structure 130.7.3 Leverage 133.Operating Leverage 133.Operating Leverage, Fixed Cost, and Business Risk 136.Financial Leverage 137.Total or Combined Leverage 144.7.4 Summary 145.Key Concepts 146.Discussion Questions 146.CHAPTER 8 PROFIT AND THE COST VOLUME ANALYSIS 148.8.1 Profit Concept Between Economics and Accounting 148.8.2 Profit Margin and Markup 149.8.3 Profit and Cash Flow 152.8.4 Profitability and Earning Power 154.8.5 When Would a Firm Start Collecting Profits? 156.Cost Volume Profit Analysis 156.8.6 Break–Even Quantity and Break–Even Revenue 158.8.7 Break–Even Graphics 162.8.8 Desired Profit and the Break–Even Point 164.8.9 Non–Cash Charges and the Break–Even Point 166.8.10 Profit Planning 168.8.11 Summary 169.Key Concepts 170.Discussion Questions 170.CHAPTER 9 PRO FORMA STATEMENT AND FINANCIAL FORECASTING 172.9.1 Basic Pro Forma Statements 173.Pro Forma Income Statement 174.Pro Forma Balance Sheet 176.9.2 Pro Forma and the Sales Ratio 176.9.3 Change in Sales ( S) and the Needed Fund 178.Financial Forecasting 178.9.4 Role of Financial Forecasting 179.9.5 Basic Steps of Forecasting 180.9.6 Types of Forecasting Models 181.Qualitative Models 182.Quantitative Models 183.9.7 The Analysis of Time Series 184.Time Series and Data Variations 184.9.8 Fitting the Model 185.9.9 Adjusting for Seasonality 189.The Simple Average of Errors Method 190.The Actual to Forecast (A/F) Ratio Method 193.The Dummy Variables Method 194.9.10 The Smoothed Forecasts 197.Simple Moving Average Method 197.The Weighted Moving Average 200.Exponential Smoothing 201.9.11 Barometric Forecasting 204.9.12 Testing Forecasting Accuracy 206.The RMSE Check 207.The MAD Check 209.The MAPE Check 211.9.13 Summary 212.Key Concepts 213.Discussion Questions 213.CHAPTER 10 WORKING CAPITAL 214.10.1 What is Working Capital? 214.10.2 Working Capital and Profit–Risk Manipulation 215.10.3 Working Capital and Financing Strategies 218.The Aggressive Approach 219.The Conservative Approach 219.The Balanced Approach 219.10.4 Summary 221.Key Concepts 221.Discussion Questions 221.CHAPTER 11 FINANCIAL MANAGEMENT OF WORKING CAPITAL 223.11.1 Cash Management 223.The Required Minimum Cash 224.Types of Cash and Floats 225.11.2 Marketable Securities Management 228.Common Marketable Securities 228.11.3 Account Receivable 229.Credit Control 229.Credit Evaluation 231.Cash Discount to Speed Up Collection 233.Account Receivable Aging 235.Current Liabilities Management 237.11.4 Account Payable and Trade Discounts 238.1. The Traditional Method 238.2. The NCRF Method 239.Cash Discount for Prompt Payments 240.Cumulative and Quantity Discounts 240.11.5 Summary 241.Key Concepts 241.Discussion Questions 242.CHAPTER 12 INVENTORY MANAGEMENT AND CONTROL 243.12.1 What is Inventory? 243.Inventory Functions 244.Inventory Cost 244.ABC Analysis 245.12.2 Economic Order Quantity (EOQ) 245.EOQ for Quantity Discount 249.EOQ for the Production–Run Model 251.12.3 The Reorder Point 255.Determining the Safety Stock Level 255.12.4 JIT–Inventory System 260.12.5 Summary 260.Key Concepts 261.Discussion Questions 261.CHAPTER 13 INVESTMENT PROJECT EVALUATION AND RISK MANAGEMENT 263.13.1 Categories of Investment Purposes 264.Replacement Projects 264.Renewal Projects 264.Expansive Projects 264.Cost–Reduction Projects 264.Conforming Projects 264.Other projects 264.13.2 Steps for Project Selection 265.13.3 Types of Projects 266.Independent Projects 266.Mutually Exclusive Projects 266.13.4 Patterns of Cash Flow 267.The Conventional Pattern 267.The Non–conventional Pattern 269.13.5 Project Evaluation Techniques 269.Average Rate of Return 269.Payback Period 271.Net Present Value 272.Internal Rate of Return 276.NPV versus IRR for Mutually Exclusive Projects 279.NPV Profile, Crossover Rate, and the Ranking Reversal 282.Profitability Index and Capital Rationing 284.Investment Projects and Business Risk 286.13.6 Risk and its Sources 287.Where Would Risk Come From? 288.13.7 Methods of Risk Management 288.Risk–Adjusted Discount Rate 289.Risk–Adjusted Returns 292.The Statistical Adjustment 295.13.8 Sensitivity Analysis, Scenario Analysis, and Simulation 297.Decision Tree 300.13.9 Summary 300.Key Concepts 301.Discussion Questions 301.CHAPTER 14 BUSINESS VALUATION AND HARVESTING 303.14.1 What is Business Valuation? 303.14.2 Valuation Tools 304.Book Value of Assets and Shares 304.Market Price of Shares 304.Capitalization of Major Variables 304.14.3 Valuation Techniques 305.The Multiplier Approach 305.The Capitalization Approach 308.Varieties of the Capitalization Approach 311.Harvesting 311.14.4 What is Business Harvesting? 311.14.5 Harvesting Strategies 312.Systematic Liquidation 312.Outright Sale 313.Acquisition 314.Going Public 315.14.6 Summary 317.Key Concepts 317.Discussion Questions 317.PART IV ENTREPRENEURIAL MANAGEMENT AND CONTROL.CHAPTER 15 BASIC ENTREPRENEURIAL MANAGEMENT 321.15.1 Planning 322.Concepts of Planning 322.The Planning Process 323.15.2 Organizing 324.Defining the Tasks 324.Functional Departmentalization 324.Range of Control 324.Delegation of Authority 325.Types of Organizational Structures 325.15.3 Staffing 326.15.4 Directing 326.Leadership and Leaders 327.15.5 Controlling 329.15.6 Business Strategies 330.Product Differentiation 330.Cost Minimization 330.Niche Creation 331.15.7 Summary 331.Key Concepts 332.Discussion Questions 332.CHAPTER 16 LOCATION AND LAYOUT 334.16.1 Factors Affecting the Selection of Location 335.The General Factors 335.Specific Factors 336.16.2 Types of Business Outlets and Locations 337.Outlets by Types of Goods and Services 338.Retail Outlet Locations 339.Service Outlet Locations 340.Wholesale Outlet Locations 340.Production Plant Locations 340.16.3 Site Selection 341.Low Customer Contact Businesses 342.High Customer Contact Businesses 343.Good Visibility 343.Adequate and Proper Parking 343.Selected Quantitative Measures 344.Radius of the Trading Area 346.Expansion Consideration 347.16.4 Site Alternatives 347.Downtown Area 347.Shopping Plazas and Malls 347.Throughout Neighborhoods 347.At Home 348.16.5 Layout and Design 348.Retail Layout 348.Wholesale Layout 353.Manufacturing Layout 353.Service Layout 354.Exterior/Interior Considerations 356.Sight, Sound, and Smell Considerations 356.Environmental Considerations 357.16.6 Summary 357.Key Concepts 357.Discussion Questions 358.CHAPTER 17 OPERATIONS, BUDGETING, AND TAXES 359.Operations 359.17.1 Material and Supplies: Buying or Making? 360.17.2 Product Quality 361.Quality Control 362.Statistical Methods to Control Quality 362.Budgeting 363.17.3 Budgetary Variance and Flexible Budgeting 364.17.4 Types of Budgets 365.Operating Budget 365.Cash Flow Budget 366.17.5 Considerations for Budgetary Control 368.Taxes 368.17.6 Types of Taxes 369.Firm s Own Business Taxes 369.Sales Taxes 369.Employment–Related Taxes 369.Owner s Taxes 370.17.7 Taxes and Forms of Business Ownership 371.17.8 Considerations and Strategies 371.17.9 Summary 373.Key Concepts 374.Discussion Questions 374.CHAPTER 18 MARKETING, PROMOTION, AND DISTRIBUTION 375.18.1 Market and Customer 375.The Changing Target Market 376.18.2 Marketing and Customer s Decisions 378.Identifying the Needs/Wants 378.Searching and Collecting Information 379.Evaluating the Alternatives 379.Making the Final Choice 379.Post–Purchase Stage 380.18.3 Marketing Research 381.Secondary Data 381.Primary Data 382.Marketing Strategy 383.18.4 Product 383.Product Life Cycle 384.The Total Product 385.Product Commercialization 389.18.5 Price 389.Considerations for a Pricing Policy 389.Price Strategies 390.18.6 Place 393.Storage 393.Transportation 394.Distribution 394.18.7 Promotion 396.Personal Selling 396.Sales Promotion 397.Advertising 398.Publicity and Public Relations 399.18.8 Summary 400.Key Concepts 400.Discussion Questions 401.CHAPTER 19 HUMAN RESOURCE MANAGEMENT 402.19.1 Job Analysis 402.Job Description 403.Job Specification 403.Job Application 403.Job Satisfaction 404.19.2 Personnel Planning 404.Recruiting 405.Screening and Selecting 406.Hiring and Orienting 408.Compensation and Benefits 412.Appraisal and Evaluation 414.Terminating 416.Other Issues 416.The Discipline System 418.19.3 Summary 419.Key Concepts 420.Discussion Questions 420.APPENDIX 421.GLOSSARY 427.FURTHER READING 439.INDEX 441

• ISBN: 978-1-118-69151-9
• Editorial: Wiley–Blackwell
• Encuadernacion: Cartoné
• Páginas: 480
• Fecha Publicación: 06/03/2015
• Nº Volúmenes: 1
• Idioma: Inglés