November 21, 2011
Instructor Trent Dodds
Entrepreneurship allows an individual to experience the joy of doing a job he or she loves while taking control of one’s own destiny and providing societal contributions. Despite surmounting wealth there are potential drawbacks. Launching a business requires a huge undertaking of the entrepreneur’s time and energy. There is no way to guarantee the venture will survive, grow, or produce a profit. Developing a strategic business plan to manage capital and human resources is quintessential to escaping some of the potential pitfalls. In addition, creating pro forma financial statements to determine the assets necessary for business operations, and to present to potential investors and lenders is critical to the success of the new venture. However, it is important for entrepreneurs to evaluate the business performance to forecasted projections, and correct variances as necessary to meet budget requirements (Scarborough, Wilson, & Zimmerer, 2009, p. 210).
As with any viable business, the Hive Dance Club requires a thorough, sensible, and accurate financial plan. The pro forma will analyze the club owner’s ability to manage capital and human resources to ensure revenue and control cost in each scenario. Furthermore, it will aid in determining the lowest and highest scenarios of performance. The paper will also provide alternative recommendations for raising capital, and offer an explanation for choosing these means. Last, Team C will evaluate the benefits of reviewing financial information in a pro forma.
Capital and Human Resources Used to Ensure Revenue and Control Cost
The owner of the Hive Dance Club has developed a pro forma statement forecasting three scenarios for controlling the business revenue and operational cost. A focus on the venture beverage costs and sales is crucial because above industry average beverage cost can negatively impact the business profits....