Overview

This fifth edition of a classic and comprehensive resource presents an applied, realistic view of entrepreneurial finance for today’s entrepreneurs, completely updated to address the latest trends and technologies. The book provides an integrated set of concepts and applications, drawing from entrepreneurship, finance and accounting, that will prepare aspiring entrepreneurs for the world they will most likely face as they start their new businesses. The contents are designed to follow the life cycle of a new business venture. Topics are presented in logical order, as entrepreneurs will likely face them as they begin the process of business start-up and move into growing the business. Both undergraduate and graduate students will appreciate the clear presentation of complex issues, and this book is an essential resource for budding entrepreneurs as well. A comprehensive spreadsheet financial template is included with the book, and an all-new case study provides questions that will help students learn the template as they proceed through the book. This tool allows for the application of many of the concepts to actual businesses and can be a valuable supplement to the process of developing a full business plan. The spreadsheet financial template is available for unlimited free downloads at Professor Cornwall’s blog site: www.drjeffcornwall.com.

Full Product Details

Author:   Jeffrey R. Cornwall ,  David O. Vang ,  Jean M. Hartman
Publisher:   Taylor & Francis Ltd
Imprint:   Routledge
Edition:   5th edition
Weight:   0.793kg
ISBN:  

9780367335410

ISBN 10:   0367335417
Pages:   346
Publication Date:   27 August 2019
Audience:   College/higher education ,  Undergraduate ,  Postgraduate, Research & Scholarly
Format:   Hardback
Publisher's Status:   Active
Availability:   In Print  
This item will be ordered in for you from one of our suppliers. Upon receipt, we will promptly dispatch it out to you. For in store availability, please contact us.

Table of Contents

List of Figures List of Tables List of Exhibits 1 Introduction THE IMPORTANCE OF KNOWING THE NUMBERS MEASURING SUCCESS WHAT IS ENTREPRENEURIAL FINANCIAL MANAGEMENT? WHAT MAKES ENTREPRENEURIAL FINANCE SIMILAR TO TRADITIONAL FINANCE? WHAT MAKES ENTREPRENEURIAL FINANCE DIFFERENT FROM TRADITIONAL FINANCE? LACK OF HISTORICAL DATA TO MEASURE RISK TRADITIONAL FINANCIAL CONCEPTS OF RISK AND RETURN HOW THE LACK OF HISTORICAL DATA AND LIQUIDITY COMPLICATES THE PRACTICE OF FINANCE IN EARLY-STAGE FIRMS USING STAKEHOLDER ANALYSIS TO GUIDE ETHICAL DECISION MAKING SUMMARY DISCUSSION QUESTIONS OPPORTUNITY FOR APPLICATION REFERENCES PART I BUILDING A FINANCIAL FORECAST 2 Setting Financial Goals WEALTH VERSUS INCOME INTEGRATING NONFINANCIAL GOALS INTO THE BUSINESS THE IMPORTANCE OF SELF-ASSESSMENT THE SELF-ASSESSMENT PROCESS THE BUSINESS MODEL AND BUSINESS PLAN SUMMARY DISCUSSION QUESTIONS OPPORTUNITY FOR APPLICATION REFERENCES APPENDIX 2.1. INDIVIDUAL ENTREPRENEURIAL SELF-ASSESSMENT APPENDIX 2.2. PARTNERSHIP AND SHAREHOLDER ASSESSMENT 3 Understanding Financial Statements THE ACCOUNTING EQUATION AN EXAMPLE BASIC FINANCIAL STATEMENTS INCOME STATEMENT BALANCE SHEET Assets Liabilities Owners’ Equity STATEMENT OF CASH FLOWS SUMMARY DISCUSSION QUESTIONS OPPORTUNITIES FOR APPLICATION 4 Revenue Forecasting COMMON FORECASTING MISTAKES 1. THE LINEAR FORECAST MISTAKE 2. THE HOCKEY STICK FORECAST MISTAKE 3. THE 20/80 VERSUS 80/20 MISTAKE THE LINK BETWEEN THE MARKETING PLAN AND REVENUE FORECASTS 1. INDUSTRY AND MARKET TRENDS 2. MARKET RESEARCH 3. COMPETITIVE ANALYSIS CREATING SCENARIOS THE LINK BETWEEN THE REVENUE FORECAST AND THE CASH FLOW FORECAST THE IMPACT OF BUSINESS TYPE ON REVENUES MANUFACTURING FIRMS SERVICE FIRMS Billing by the Hour Billing by the Job RECURRING REVENUE FIRMS COMMISSION-BASED SELLING FIRMS CYCLICAL OR SEASONAL SALES FIRMS International Sales Firms QUANTITATIVE FORECASTING TECHNIQUES THE IMPORTANCE OF REVENUE FORECASTING SUMMARY DISCUSSION QUESTIONS OPPORTUNITIES FOR APPLICATION 5 Expense Forecasting DEFINING COSTS COST BEHAVIOR VARIABLE COSTS FIXED COSTS MIXED COSTS BREAKEVEN ANALYSIS EXPENSE FORECASTING: THE IMPACT OF BUSINESs TYPE ON EXPENSES MANUFACTURING FIRMS SERVICE FIRMS RECURRING REVENUE FIRMS COMMISSION-BASED SALES FIRMS CYCLICAL OR SEASONAL FIRMS INTERNET BASED FIRMS REDUCING EXPENSES THROUGH BOOTSTRAPPING SUMMARY DISCUSSION QUESTIONS OPPORTUNITIES FOR APPLICATION REFERENCE 6 Integrated Financial Model THE ENTREPRENEUR'S ASPIRATIONS RECONSIDERED CONTRIBUTION FORMAT INCOME STATEMEN EARNINGS BEFORE INTEREST AND TAXES INVENTORY OF ASSUMPTIONS SOCIAL VENTURES DETERMINING THE AMOUNT OF FUNDS NEEDED USING THE FORECASTING TEMPLATE TO DETERMINE THE AMOUNT OF FUNDS NEEDED CASH RUNWAY OR TIME OUT OF CASH ASSESSMENT OF RISK SENSITIVITY INTEGRATING FINANCIAL FORECASTS INTO BUSINESS PLAN OR FUNDING DOCUMENT SUMMARY APPENDIX 6.1. INSTRUCTIONS FOR USING THE INTEGRATED FINANCIAL STATEMENTS TEMPLATE PRODUCT MODEL [FOR A BUSINESS THAT SELLS INVENTORY] SERVICE MODEL [FOR A BUSINESS THAT SELLS SERVICES] SOCIAL VENTURE MODEL [FOR A NONPROFIT BUSINESS] PART II MANAGING THE FINANCIAL RESOURCES OF A VENTURE 7 Monitoring Financial Performance TRACKING ASSUMPTIONS ESTABLISHING MILESTONES USING NUMBERS TO MANAGE FINANCIAL STATEMENT ANALYSIS RATIO ANALYSIS LIQUIDITY RATIOS ACTIVITY RATIOS PROFITABILITY RATIOS SOLVENCY AND COVERAGE RATIOS WORKING WITH ACCOUNTANTS SUMMARY DISCUSSION QUESTIONS OPPORTUNITIES FOR APPLICATION REFERENCES 8 Day-to-Day Cash Flow Management and Forecasting WHY IS CASH FLOW DIFFERENT FROM NET INCOME? WHY Is AN ACCRUAL-BASED INCOME STATEMENT IMPORTANT? How Is CASH FLOW MEASURED? INTERPRETING A STATEMENT OF CASH FLOWS: DIRECT METHOD STATEMENT OF CASH FLOWS： INDIRECT METHOD INVESTORS' AND CREDITORS' USE OF THE CASH FLOW STATEMENT EFFECTIVE CASH MANAGEMENT THE EMOTIONAL SIDE OF CASH FLOW MANAGEMENT SUMMARY DISCUSSION QUESTIONS OPPORTUNITIES FOR APPLICATION REFERENCES PART III SOURCES OF FINANCING 9 Financing Over the Life of a Venture COMMON MISCONCEPTIONS ABOUT ENTREPRENEURIAL FINANCING THE DIVERSE NATURE OF BUSINESS FINANCING THE NATURE OF THE BUSINESS MODEL ASPIRATIONS OF THE ENTREPRENEUR THE STAGE OF DEVELOPMENT OF THE BUSINESS VENTURE FITTING THE PIECES OF THE FINANCING PUZZLE TOGETHER FINANCING SMALL BUSINESSES WITH MODEST GROWTH POTENTIAL FINANCING HIGH-GROWTH, HIGH-POTENTIAL VENTURES SUMMARY DISCUSSION QUESTIONS OPPORTUNITIES FOR APPLICATION REFERENCES 10 Start-Up Financing from the Entrepreneur, Friends, and Family SELF-FINANCING ADVANTAGES AND DISADVANTAGES OF SELF-FINANCING FRIENDS AND FAMILY FINANCING DETERMINE TRUE MOTIVATIONS USE A FORMAL BUSINESS PLAN PROVIDE ACCURATE, OBJECTIVE, AND FULL INFORMATION ABOUT THE BUSINESS KEEP BOUNDARIES TAX PLANNING STRUCTURE OF FUNDS INVESTED SUMMARY DISCUSSION QUESTIONS OPPORTUNITIES FOR APPLICATION REFERENCES 11 Bootstrapping WHY BOOTSTRAP? BOOTSTRAPPING ADMINISTRATIVE OVERHEAD SPACE FURNISHINGS AND OFFICE EQUIPMENT ADMINISTRATIVE SALARIES BOOTSTRAPPING EMPLOYEE EXPENSES INDEPENDENT CONTRACTORS FRACTIONAL AND TEMPORARY EMPLOYEES STUDENT INTERNS EQUITY COMPENSATION NONMONETARY BENEFITS BOOTSTRAPPING OPERATING EXPENSES BOOTSTRAP MARKETING THE BASIC BOOTSTRAP MARKETING TOOLS Word of Mouth Business Cards Blogs Websites Banners and Signs Email Marketing Publicity THE ETHICS OF BOOTSTRAPPING SUMMARY DISCUSSION QUESTIONS OPPORTUNITIES FOR APPLICATION REFERENCES 12 External Sources of Funds: Equity ACCREDITED INVESTORS ANGEL INVESTORS STRATEGIC PARTNERS PRIVATE PLACEMENT PRIVATE EQUITY CROWDFUNDING SBIC THE DOWNSIDE OF EQUITY FINANCING WORKING WITH OUTSIDE INVESTORS BUSINESS MODEL AND BUSINESS PLAN CONFIDENTIALITY AGREEMENT LETTER OF INTENT MODIFICATIONS OF SHAREHOLDER AGREEMENTS COMMUNICATION WITH SHAREHOLDERS SUMMARY DISCUSSION QUESTIONS OPPORTUNITIES FOR APPLICATION REFERENCES 13 External Sources of Funds: Debt SHORT-TERM DEBT TRADE CREDIT INSTITUTIONAL CREDITORS Banks Asset-Based Lenders Factors LONG-TERM DEBT BANKS LEASING COMPANIES REAL ESTATE LENDERS GOVERNMENT FUNDING THROUGH SBA WORKING WITH BANKERS INITIAL CONTACT WITH BANKERS PREPARATION OF KEY LOAN DOCUMENTS Loan Proposal Loan Document Personal Guarantees ONGOING COMMUNICATION AFTER THE LOAN IS MADE OTHER SOURCES OF DEBT FINANCING FOR ENTREPRENEURS THE DOWNSIDE OF DEBT DEVELOPING A FINANCING PLAN SUMMARY DISCUSSION QUESTIONS OPPORTUNITIES FOR APPLICATION REFERENCES 14 Financing the High-Growth Business INTEGRATING PROFITABILITY INTO THE BUSINESS PLAN STAGES OF THE FIRM STAGES OF BUSINESS FUNDING THE DARK SIDE OF VENTURE CAPITAL FINANCING INITIAL CONTACT WITH A VENTURE CAPITALIST INITIAL PUBLIC OFFERING ADVANTAGES OF AN IPO DISADVANTAGES OF AN IPO THE PROCESS OF THE IPO PRIVATE EQUITY SUMMARY DISCUSSION QUESTIONS OPPORTUNITIES FOR APPLICATION REFERENCES PART IV PLANNING FOR THE ENTREPRENEUR’S TRANSITION 15 Business Valuation GENERAL CONCEPTS THAT GUIDE THE DETERMINATION OF VALUE FAIR MARKET VALUE GOING-CONCERN VALUE HIGHEST AND BEST USE FUTURE BENEFITS SUBSTITUTE AND ALTERNATIVES DISCOUNTED CASH FLOW ANALYSIS OBJECTIVITY BASIC INFORMATION REQUIRED FOR A VALUATION DISCOUNTED CASH FLOW EFFECT ON THE BALANCE SHEET OF THE NEW OWNERS (GOODWILL) DEFINITION OF FREE CASH FLOW ESTIMATING FREE CASH FLOW FOR A PARTICULAR YEAR ESTIMATING FREE CASH FLOW OVER A SIX-YEAR PERIOD SUMMARY OF THE DISCOUNTED CASH FLOW APPROACH MARKET COMPARISON TECHNIQUES SUMMARY OF THE MARKET COMPARISON APPROACH SUMMARY DISCUSSION QUESTIONS OPPORTUNITIES FOR APPLICATION REFERENCES 16 Exit Planning A MODEL OF EXIT PLANNING Self-Assessment Revisited and Setting a Time Frame Manage Financial Statements Strengthen Systems and Processes Develop a Business Plan for the Sale of the Business EXIT OPTIONS Ownership Transfer Partial or Transitional Transfer Bankruptcy or Planned Termination of Operations THE PROCESS OF SELLING A BUSINESS THE ETHICAL SIDE OF THE ENTREPRENEUR'S TRANSITION POST-EXIT ISSUES SUMMARY DISCUSSION QUESTIONS OPPORTUNITIES FOR APPLICATION REFERENCES

Reviews

Author Information

Jeffrey R. Cornwall is the inaugural recipient of the Jack C. Massey Chair and professor of Entrepreneurship at Belmont University in Nashville, Tennessee. He has a DBA and an MBA from the University of Kentucky. David O. Vang is a professor of finance in the Opus College of Business at the University of St. Thomas in St. Paul, Minnesota. Jean M. Hartman holds a BA in business administration and accounting from Southwest Minnesota State University and an MBA from the University of St. Thomas. She is a certified public accountant.

Tab Content 6

Author Website:  

Customer Reviews

Recent Reviews

No review item found!

Add your own review!

Countries Available

All regions