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Small business owners looking for an easy-to-use "profit and loss projection form" for their specific industry are rarely as fortunate as you. Why? It may seem almost unbelievable, but you can obtain a custom pet grooming business "Annual Profit and Loss Projection" form in From Problems to Profits. You make photocopies of the blank form in the business manual, and voila! You have an expert financial management tool designed expressly for pet grooming. Also, there are instructions line-by-line included in the book to complete the entire form.

Your annual projection is like the "big picture" of your financials goals for each year you create one. Remember, if you are going to seek a business loan you will need a pet grooming business plan with a five-year financial projection to submit with your loan application to the banker, or investor as the case may be. We strongly suggest that your financials be reviewed by your bookkeeper, accountant and management consultant. In fact, most people have one or all of them prepare their financial projections, but if you will take the time to work with the form yourself you will not only learn more about financial management, but save your professionals working time and possibly reduce their fee.

If you are expanding an existing business, you should use your most current set of annual financials to assist you with creating projections for future performance.

By creating a realistic annual profit and loss projection, you have a more sound idea of what you can expect to earn from your business in the year or years ahead. Of course, you need to compare your projection with actual performance on at least a monthly basis. By comparing them, you become more skilled at making accurate projections, and you can intercede earlier to prevent or limit financial downturns or other problems. Your projections for the financial performance of your business, and the figures of your business' actual performance should be formatted by a bookkeeper or accountant into monthly, quarterly and annual "financial statements." Let's take a close look at financial statements.

Financial Statements

Financial statements consist of an Income Statement and Balance Sheet. Preparation of them requires accurate daily records of your business' financial activities. We will take a closer look at the daily records in the material ahead. For now, let's get a better understanding of the financial statements.

The Income Statement is sometimes called a Profit and Loss Statement, and looks a great deal similar to the Annual Profit and Loss Projection described above. Financial statements cover a period of time, typically a monthly, quarterly or annual period. It lists the major areas where income was earned along with a grand total of income for the period. Subtotals for categories of operating expenses are listed, along with a grand total of operating expenses during the same period when the total income shown was generated. By subtracting the total operating expenses from the total income, you deduce the profit or loss incurred by the business during the period.

The Balance Sheet is a more general picture of the business at any one moment in time. It is more ideal for financial analysis to match the selected moment in time for the Balance Sheet with the end of the time period represented by the companion Income Statement. The Balance Sheet shows assets, liabilities and owner equity, and not income and expenses.

Unless you have very strong bookkeeping and accounting skills, you will need a bookkeeper and/or accountant to prepare monthly and annual financial statements for your business. Never get behind in your responsibilities for business bookkeeping, and don't delay in establishing a professional working relationship with a bookkeeper and/or accountant before you open a new business. Your bookkeeping and financial statements are open to review by tax authorities. But that it isn't the only reason for financial statements. Learn to interpret them with professional assistance in order to monitor a more efficient business, a more profitable business.

Bookkeeping Practices

There is extremely little in the way of pet grooming specific bookkeeping reference information. However, what there is, is superior! We strongly recommend you obtain perhaps the finest bookkeeping forms in the pet grooming industry by purchasing a copy of From Problems to Profits. The bookkeeping and finance chapters are alone worth the cover price of this comprehensive business manual for pet grooming business owners. In fact, Find A Groomer, Inc. also sells copies of the bookkeeping forms at reasonable prices, but you can also make your own using the models in the manual.

You may not think that there is a lot of financial data involved in pet grooming. Well, there is. You can just add it up and say, "I earned $292.00 today by grooming 9 pets and selling one bottle of shampoo." Does that summary really give you information to plan your marketing, advertising and inventory purchases? Not really. It would be far more effective to know that you groomed 7 complete trim and bath pets. Of these, 3 were Poodles, 2 were Bichon Frises, and 2 were Terriers. There were 2 bath-only pets, both Golden Retrievers. The shampoo sold was the new all-natural de-flea product. By breaking down the services and retail, and then comparing the current breakdown to breakdowns for several other business days, you may find trends. Perhaps your bath-only services are increasing and not the demand for complete trim and baths. Why? Perhaps you will find that you increasingly doing more and more Bichon Frises. Why? Or, perhaps you are losing bath-only business, and no longer doing any Bichon Frises, and retail sales have dropped considerably. In this overly simple example you may see the value of financial data analysis. You can stop downturns before they get worse by determining they exist, and boost upturns even higher, but you have to collect detailed data, and take the time to consider the meaning of your data.

Important financial and bookkeeping information continues on the next page.