DK Smith - Financial Planning

Financial Planning for Creative Professionals D.K. Smith, Brooklyn Innovation Center dk@BrooklynInnovationWeek.com – 718-395-6567

Agenda • Start-up Funds • Most Important Financial Statement • Float, Borrow & Lend • Final Thoughts

Start-up Funds At least 8 months of living expenses‌

Start-up Funds At least 8 months of living expenses‌ 12 months or more is better!

Start-up Funds At least 8 months of living expenses‌ 12 months or more is better!

Working capital‌

Start-up Funds At least 8 months of living expenses…

12 months or more is better!

Working capital… pays the business’ bills

Cash flow matters most…

• $$$ to maintain working capital • $$ to pay yourself

• $ to forward thinking… marketing/etc

Why cash flow matters most…

• If you don’t forecast cash flow you’re flying blind!

Why cash flow matters most…

• If you don’t forecast cash flow you’re flying blind!

• Nice to sleep well at night

Why cash flow matters most…

• If you don’t forecast cash flow you’re flying blind!

• Nice to sleep well at night • Create maximum degrees of freedom!

Life on the FLOAT

Life on the FLOAT • Work comes in

Life on the FLOAT • Work comes in…

• Money goes out to produce… time is money!

Life on the FLOAT • Work comes in…

• Money goes out to produce… time is money!

• You wait to get paid!

When business is going great‌

When business is going great… …FLOAT GETS BIGGER FAST!

When business is going great… …FLOAT GETS BIGGER FAST!

Borrow & Lend to the rescue!

Borrow & Lend… …from & to YOURSELF

Borrow & Lend… …from & to YOURSELF

• Cover with business credit card

• Maximum lend… 60 to 70% of incoming $$$

Borrow & Lend… …from & to YOURSELF

• Cover with business credit card

• Maximum lend… 60 to 70% of incoming $$$ • When your ability to cover is exceeded, seek bank financing… an over-draft credit line, which is NOT over-draft protection!

Final Thoughts It’s all about CASH FLOW! Create multiple cash flow scenarios How sensitive is your business to changes in revenue and expenses?

Get expert advice BEFORE you need it!

Questions?

Now and later…

• D.K. Smith, 718-395-6567 • dk@BrooklynInnovationWeek.com