2010 Business Resolution: Plan to Succeed

Overview: NAWBO-NW presents the Entrepreneurial Program Series during their monthly chapter meetings. In January, the Entrepreneurial Program featured Sandee Atwood of Fruci & Associates P.S. and Robyn Parks of Parks Associates CPA, speaking about staying accountable to your 2010 budget and business plan.


I sat and listened Thursday evening to a very informative panel moderated by Nancy Nelson, President of Humanix Staffing and Recruiting, including speakers Sandee Atwood of Fruci & Associates P.S. and Robyn Parks of Parks Associates, CPA. As Nelson fired questions at the panel, each rebounded with informative and well explained answers that even someone who isn't a CPA could understand. Here are some of the questions and answers that were shared with us.

The Building Blocks We Have to Have: Budget & Business Plan

Q: Why is budgeting and business planning important?

A: It measures where you are at, where you want your business to go, and it measures benchmarks that bring you to reality.
A: It makes you be realistic and measure benchmarks: worst case, expected, and best case scenarios.


Q: What are the 3 worst things that can happen if you don't have a budget or business plan?

A: Not doing your homework and simply guessing; when really you should be watching it through cashflow to baseline.
A: Never validating assumptions; never making sure it is not wishful thinking.
A: Mistaking a budget or business plan for goals. This isn't a goal, we need to be realistic, base a budget on facts, and history.
A: Forgetting as your sales forecast goes up, you need to take costs up as well.
A: Not having the big 3: Cash Flow Statement, Profit & Loss Statement, and Balance Sheet.
A: I would recommend a 12 month, or monthly budget, with quarterly updates; where the update happens as a meeting of all involved in setting the budget.
A: You can do the 12 month budget, but I like to suggest a rolling 12 month budget where you always project 12 months out, no matter where you are in the fiscal year.
A: Then to follow up on your budget, you need to do a "smell" test and answer the question, "did it work?"


Q: How important is cash flow?

A: For those not in an accounting business, cashflow can be forgotten; but if you want to grow your business, you need to watch cashflow.
A: Yes, most of us know Profit & Loss, but most do not watch cash flow...and you need postive cash flow each month, especially if you're expecting growth.
A: There is a difference between cashflow and the cashflow statement. Cashflow = cash in at the beginning of the period -cash out at the end of the period.


Q: Cash basis vs. accrual basis, especially as it relates to gift card redemption? this question came from the audience

A: The question you're asking is: "Do I put it on the books when I sell it, or when it is redeemed?" The question I have for you is, does it expire?
A: Even with no expiration date, if it is never redeemed, Washington makes you "claim" in 3 years.
A: For a service industry, make it a liablility because you haven't done the work. Then put it into your books at the time of service. If it has not been redeemed in 3 years, you can write it off.
A: Short answer: debit promotion, credit liablility


Q: Is there any other advice you can provide that helps us follow through to keep the budget?

A: Do it before the beginning of next year, like November.
A: Make yourself accountable - share it with someone else.
A: If this is your first time, 3 years may be too big of a timespan. Start at 90 days and see how you did. Then go forward further each time, until you get to 1 year.

Resources & Downloads

Cash Flow Projection Worksheet

Cash Flow - 12 month Worksheet

written by: Heather Pieczonka, Director of Communications