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 ventures With 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 management A 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 economy A 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 economy An in–depth discussion of the entire process of writing a successful business plan, including the rationale, significance, and requirements Techniques needed to solidify the free enterprise tradition, develop entrepreneurial strategies, and grow small businesses Entrepreneurial 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. M. J. Alhabeeb, PhD, is Professor of Consumer Economics and Finance in the Department of Resource Economics at the University of Massachusetts, Amherst. He has been teaching finance and consumer economics for over 30 years and is a recipient of The Academy of Educational Leadership′s Outstanding Teaching Award for Innovative and Creative Teaching. Dr. Alhabeeb is the author of Managerial Economics: A Mathematical Approach and Mathematical Finance , both of which are published by Wiley.

PREFACE PART I:  ENTREPRENEURIAL PERSPECTIVE 1. Small Business and the Entrepreneur 1.1 What is Entrepreneurial Finance? 1.2 Significance of the Small Business 1.3 Entrepreneurship and the Entrepreneur 1.4 The Idea and the Opportunity 1.5 From an Idea to Reality 2. Small Business Options 2.1 Starting a New Business 2.2 Buying an Existing Business 2.3 Purchase Options 2.4 Franchise 2.5 Home Business and Family Business 3. Small Business Purchase Price 3.1 Asset–based Value 3.2 Cash Flow–based Value 3.3 Market–based Value 3.4 Capitalized Earnings–based Value 3.5 Financial Ratios–based Value PART II: ENTREPRENEURIAL ORGANIZATION 4. Forms of Business Ownership 4.1 Sole Proprietership 4.2 Partnership 4.3 Corporation 4.4 Other Forms of Business Ownership 5. The Business Plan 5.1 What is a Business Plan 5.2 Contents of the Plan 5.3 Other Elements of the Plan 5.4 Reviewing the Plan 5.5 Responses to Potential  Risks 5.6 Financing the Plan 5.7 Presenting the Plan 5.8 Updating the Plan 5.9 Grooming the Plan PART III: ENTREPRENEURIAL FINANCE AND VALUATION 6. Financial Statements and their Analysis 6.1 The Balance Sheet 6.2 Income–Expenses Statement 6.3 Financial Statement Analysis 6.4 Ratio Analysis 6.5 The DuPont Model 7. Capital Structure and Leverage 7.1 Debt and Equity Capital 7.2 The Optimal Capital Structure 7.3 Leverage 8. Profit and the Cost–Volume Analysis 8.1 Profit Concept between Economics and Accounting 8.2 Profit Margin and Markup 8.3 Profit and Cash Flow 8.4 Profitability and Earning Power 8.5 When Would a Firm Start Collecting Profits? 8.6 Break–even Quantity and Break–even Revenue 8.7 Break–even Graphics 8.8 Desired Profit and the Break–even Point 8.9 Non–cash Charges and the Break–even Point 8.10 Profit Planning 9. Pro Forma Statement and Financial Forecasting 9.1 Basic Pro Forma Statements 9.2 Pro Forma and the Sales Ratio 9.3 Changes in Sales and the Needed Fund 9.4 Role of Financial Forecasting 9.5 Basic Steps of Forecasting 9.6 Types of Forecasting Models 9.7 The Analysis of Time Series 9.8 Fitting the Model 9.9 Adjusting for Seasonality 9.10 The Smoothed Forecasts 9.11 Barometric Forecasting 9.12 Testing Forecasting Accuracy 10. Working Capital 10.1 What is Working Capital? 10.2 Working Capital and Profit–Risk Manipulation 10.3 Working Capital and Financing Strategies 11. Financial Management of Working Capital 11.1 Cash Management 11.2 Marketable Securities Management 11.3 Account Receivable 11.4 Account Payable and Trade Discounts 12. Inventory Management and Control 12.1 What is Inventory? 12.2 Economic Order Quantity (EOQ) 12.3 The Reorder Point (ROP) 12.4 JIT–Inventory Systems 13. Investment Project Evaluation and Risk Management 13.1 Categories of Investment Purposes 13.2 Steps for Project Selection 13.3 Types of Projects 13.4 Patterns of Cash Flow 13.5 Project Evaluation Techniques 13.6 Risk and its Sources 13.7 Methods of Risk Management 13.8 Sensitivity Analysis, Scenario Analysis, and Simulation 14. Business Valuation and Harvesting 14.1 What is Business Valuation? 14.2 Valuation Tools 14.3 Valuation Techniques 14.4 What is Business Harvesting? 14.5 Harvesting Strategies PART IV: ENTREPRENEURIAL MANAGEMENT AND CONTROL 15. Basic Entrepreneurial Management 15.1 Planning 15.2 Organizing 15.3 Staffing 15.4 Directing 15.5 Controlling 15.6 Business Strategies 16. Layout and Location 16.1 Factors Affecting the Selection of Location 16.2 Types of Business Outlets and Locations 16.3 Site Selection 16.4 Site Alternatives 16.5 Layout and Design 17. Operations, Budgeting, and Taxes 17.1 Material and Supplies: Buying or Making? 17.2 Product Quality 17.3 Budgetary Variance and Flexible Budgeting 17.4 Types of Budgets 17.5 Considerations for Budgetary Control 17.6 Types of Taxes 17.7 Taxes and Forms of Business Ownership 17.8 Considerations and Strategies 18. Marketing, Promotion, and Distribution 18.1 Market and Customer 18.2 Marketing and Customer’s Decisions 18.3 Marketing Research 18.4 Product 18.5 Price 18.6 Place 18.7 Promotion 19. Human Resource Management 19.1 Job Analysis 19.2 Personnel Planning

M. J. Alhabeeb, PhD, is Professor of Consumer Economics and Finance in the Department of Resource Economics at the University of Massachusetts, Amherst. He has been teaching finance and consumer economics for over 30 years and is a recipient of The Academy of Educational Leadership′s Outstanding Teaching Award for Innovative and Creative Teaching. Dr. Alhabeeb is the author of Managerial Economics: A Mathematical Approach and Mathematical Finance , both of which are published by Wiley.