Financial Statements

Which issues are the most important?

 

The first and most obvious response to ” Which issues are the most important?” is that the devil is in the detail. Each operation in your in your business will have specific short term goals, but they must ultimately have the same long term objectives. If any one of these operations is working at cross purposes with the long term objectives you are likely to fail. Therefore, “all” issues are important.

With that as a given you must then ask “who will be reading my business, farming or marketing plan?” For each reader, if the answer to any of the issues raised below is “NO” then you will not achieve your objective.

VENTURE CAPITALIST:-

If you are seeking investment capital and the business plan is to be presented to a venture capitalist, he/she will likely be looking at three critical issues: 1. Is there a need in the marketplace? 2. Is the market large enough to provide a reasonable return on their investment? 3. Does your organization have the personnel and capabilities necessary to penetrate and maintain a position in the marketplace?

BANKER:-

If you are seeking a loan and the business/farming plan is to be presented to a banker he/she will have the following concerns: 1. Are you a going business with a positive cash flow? 2. Does your financial statements show a growing and profitable business? 3. Do you have collateral to offer as protection against the loan?

MANAGER:-

If you are seeking full management buy-in for the plan, each manager will want the following answers: 1. Can I understand and agree with the short term & long term objectives of the plan? 2. Is my responsibility in achieving those objectives clearly discernible? 3. Will the proper implementation of the plan be of benefit to both the enterprise and to me?

ACQUIRER:-

If you are planning on selling your business the prospective buyer will want to know the following: 1. What is the short term and long term financial value of the business? 2. Will this business provide new or additional leverage for me in the marketplace? Is there adequate synergy between our products or services and our organizations to ensure a successful integration.

 

 

                         

 

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Which issues are the most important? Read More »

Exactly what documents will be needed from me to start the process?

 

 

Basically the following:

  • Copy of ID Documents for all owners in the business.    
  • Copy of Founding Statement – if business is registered as a Close Corporation.
  • Copy of Registration Certificate – if registered as a Company.                                       
  • Premises Lease Agreement.
  • Copy of Franchise Agreement – if applicable.
  • Offer to purchase – if applicable – purchase of a business / farm.
  • Agreement of Sale – if applicable.
  • CV of all owners / managers in business.
  • Bank Statements – 3 months.
  • Copy of VAT Registration – if applicable.
  • Copy of Marriage Certificate – if applicable.
  • Financial Statements – when available or purchase of a new business.
  • Copy of latest property valuation – farming business.
  • Equipment list – where applicable.

What you need for purchasing a new Franchise:-

  1. Letter from Franchisor stating that it has assessed the applicant in terms of its usual requirements.
  2. Business Plan including a financial plan.
  3. Personal Balance sheet of all prospective shareholders.
  4. Detailed CV – curriculum vitae of all prospective shareholders.
  5. Details on or proof of the source of the financial contribution by each shareholder to the venture.
  6. Detailed list of equipment to be financed.
  7. Cash Flow forecast for at least 36 months.
  8. Draft copy of the Franchise Agreement.Draft copy of Lease Agreement.
  9. Disclosure Document.
  10. Copy of bank statements for the last 6 months.
  11. Copies of any customer contracts obtained.
  12. Copy of CK1 — Close Corporations – or Company registration.Copies if ID’s for all shareholders and sureties.Proof of residential address.
  13. Copy of marriage certificate – if applicable.

What you need for purchasing an existing Franchise:-

  • Copy of purchase and sale agreement.
  • Letter from Franchisor stating that it has assessed the applicant in terms of its usual requirements.
  • Business Plan including a financial plan.
  • Personal Balance Sheet of all owners.
  • Detailed CV of all owners and managers in business.
  • Detailed equipment list.
  • Monthly cash flow for 36 months.
  • Franchise Agreement.
  • Lease Agreement.
  • Disclosure Document.
  • Bank Statements for the past 6 months.
  • Copies of any customer contracts obtained.
  • Proof of Residence.
  • Copy of marriage certificate.
  • Audited annual financial statements.
  • Latest management accounts.

WHAT DOCUMENTS DO YOU NEED FOR A FARMING OPERATION:

  1. Copy of ID Document – All owners in business.

  2. Copy of farm title deeds.

  3. Copy of lease agreement if not the owner of the farm.

  4. Resumes of all owners and managers in business.

  5. Proof of Residence.

  6. Copy of latest financial statements – if applicable.

  7. Personal Assets & Liability statement – all owners in business.

  8. Letter of Intent – where applicable.

  9. List of all equipment & values.

  10. Water rights certificate – if applicable.

  11. List of all personnel & their salaries.

  12. Copies of available contracts – if applicable.

  13. Copies of any available contracts.

                

 

 

 

 

Exactly what documents will be needed from me to start the process? Read More »