This page was last updated on Sept. 8, 2006.

Chapter 3: Initial Assessment

• Page 3.4

  The Break-even Analysis Table illustration should show the following values:

  • Average Per-unit Revenue = $325.00
  • Average Per-unit Variable Cost = $248.07
  • Estimated Monthly Fixed Cost = $94,035.00

Chapter 15: The Bottom Line

• Page 15.2

  The Costs, COGS, Direct Sales Gross Margin subtopic, first paragraph should read:
  "Although we discussed cost of sales or COGS in Chapter 14: Forecast Your Sales, you should know that it is important to Gross Margin. In standard accounting, the cost of sales or cost of goods sold are subtracted from sales to calculate gross margin. These costs are distinguished from operating expenses. Gross margin is also called Gross Profit."

Chapter 17: Finish The Financials

• Page 17.1

  The text for the Balance Sheet topic should read:
  "I showed you some basic balance sheets in Chapter 14: About Business Numbers and Chapter 16: Cash is King. You've seen then that the Balance Sheet table shows the financial position of the business, its assets and liabilities, at a specified time. A standard business plan includes a projected Balance Sheet table for each of the first 12 months in the plan, and for each of the three years.

  The ironclad rule of Western double-entry bookkeeping and accounting is that assets are equal to capital and liabilities. This is what balance means. If you think about it, you'll notice we also used that rule in the Start-up costs section of Chapter 6: Describe Your Company. It comes up again with the Balance Sheet table as we use this rule to calculate retained earnings, which makes the balance correct.

  The following illustration shows the Balance Sheet table, or pro forma Balance Sheet table. The Balance Sheet table should naturally start with either your start-up costs or your ending balance from the previous year, depending on whether you are a start-up company or an ongoing company. Then, for the first 12 months of your plan, it should give detailed projections of your assets, liabilities, and capital as your business progresses. The calculations for this come mainly from your income statement and cash flow. Between those two statements, plus the beginning balances, your Balance Sheet should be virtually done before you start."

• Page 17.6

  The Break-even Analysis Table illustration should show the following values:

  • Average Per-unit Revenue = $325.00
  • Average Per-unit Variable Cost = $248.07
  • Estimated Monthly Fixed Cost = $94,035.00

  The Break-even Chart subtopic, second paragraph should read:
  "The Analysis included in the chart in the illustration below shows a general break-even analysis for assumed fixed costs of $94,035, average per-unit revenue of $325, and average per-unit variable cost of $248."