There are 3 types of expenses. The first is her startup costs which are the expenses that happened before the beginning of the business plan. The second type of expense is a fixed cost. Fixed costs are goods and services that do not depends on the number of items that she is making. Last type of expense is a variable cost. Variable costs are costs that vary based on the number of items produced.
Break-even point - the number of bags she needs to sell each month to cover her expenses.
Break-Even point Calculator
http://www.youtube.com/results?search_query=Small+Business+Finance+peter+cameron
Remember to count in hidden expenses in your cost.
Income Statement-Simple
http://ohioline.osu.edu/cd-fact/1153.html
Cash Flow - Cash flow is the measure of how much money is coming in and going out of your business during a given period of time. Cash flow is the difference between your total incoming cash and total outgoing cash. Cash flow is different from profit and loss. A business might be on track to make a profit over the course of a year but still get into trouble if the owners do not keep track of their cash flow. Cash flow will tell whether a business is on track to lose or gain money and help you to predict whether you will have enough cash to operate your business.
How can keeping track of your cash flow help your business?
A cash flow projection is a worksheet that uses financial records from your business's past to forecast the amount of incoming and outgoing cash that you can expect your business to receive. You can use a cash flow projection to estimate when your business will be busiest and to help you make decisions about when during the year you should plan to save more money or to make more investments.
Having and maintaining a cash flow projection can help you understand the general trends in your business more clearly and be better prepared for any surprises that may come your way. To create a cashflow projection, use your business's historical financial records to estimate your expected income and expenses in the future.If you do not have historical records, research the market to estimate when you can expect to experience busier or slower times in your business.
Cashflow Projection worksheet
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