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General Forestry => General Board => Topic started by: AllyCat on August 24, 2017, 06:03:31 PM

Title: Business Plan--Financial analysis?
Post by: AllyCat on August 24, 2017, 06:03:31 PM
Hey all! I'm back again looking for advice!

My husband and I are looking into getting a business loan, and I have most of our business plan worked out. However, I have no clue how to do the financial analysis that is required! With a business like a store, it's easier to project estimates like a break even analysis or a best estimate of money needed to operate monthly for the first year and yearly for the second and third. As you all know, weather, market prices, breakdowns, etc all make it harder to estimate cash flow.

Does anyone have any advice on how to proceed with a financial analysis?

Thanks in advance!
Title: Re: Business Plan--Financial analysis?
Post by: Roxie on August 24, 2017, 06:51:19 PM
First, welcome to the forum.   :)

Sounds like it would be a good idea to invest in a textbook, called "The Portable MBA Finance and Accounting."  It gives you an excellent format for just about any financial report you can imagine, and takes you from a basic chart of accounts through to profit and loss, and balance sheets. 

Are you using Excel for spread sheets or building your financials with an accounting program, like Quickbooks?
Title: Re: Business Plan--Financial analysis?
Post by: AllyCat on August 24, 2017, 08:04:18 PM
Fantastic! I'll definitely look for the book!

We're still in the start up process, but plan on using quickbooks or similar software.

He has experience in logging and I in small business (billing, marketing, and secretary work), but we're working from the ground up basically. We're filing for Llc soon and a local organization does small business loans at lower rates than the local banks. We're pushing to get a different skidder before starting on our own, as the one he has now is jointly owned by him and his father, who will not be a part of the business and thus it creates complications withtge use of that machine.
Title: Re: Business Plan--Financial analysis?
Post by: Ron Wenrich on August 25, 2017, 08:24:33 AM
There used to be programs that matched a retired person with someone in a startup situation.  They had them at one time in my area, but I can't remember their name.  It might have been RSVP or Senior Corp.  They acted as a mentor.

The problems you'll find is a banker doesn't understand the logging business.  You might have a chance with one that is familiar with the ag sector.  What looks good to one bank will look to risky at another.  You may find a bank that will help you work out your plan.  If they are interested in loaning money, they may want your business. 

Its hard to get hard numbers on things like timber payments.  You'll need that as a starting point unless you'll be paying landowners after the harvest.  If he is in business with his father, do you have access to the books?  That should give you an idea of things like fuel, repair costs, etc that is normal operating costs.  They change on a seasonal basis, due to weather conditions. 
Title: Re: Business Plan--Financial analysis?
Post by: WV Sawmiller on August 25, 2017, 08:58:49 AM
   Welcome to the FF. Good luck and keep us posted.

   Thanks for adding some more class to the site. We need more ladies like you and Tami and Roxie help keep us old hairy legged hardtails in line.