What is a balance sheet & how to create a balance sheet in your business plan

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In this video tutorial I explain how to write a balance sheet that would be a part of the financials section of your business plan.

It can be difficult and intimidating to write a balance sheet. There are are three main components of a balance sheet: assets, liabilities, and owner equity.

There are two types of assets your company can have. There are current assets like cash you have or money that is owed to you. Current assets are accounts receivable or stocks you own. Fixed assets are property you might own, supplies you might own, or anything else that the business owns. There are also intangible assets. Intangible assets are things like patents and trademarks that your business owns.

The next major section of a balance sheet is the liabilities section. There are two types of liabilities: current liabilities and fixed liabilities.

Current liabilities are things like accounts payable (money you have to pay to anyone or any company). Fixed liabilities are things like owed pension, mortgages, debt, or bonds that you own.

The way you calculate the equity of your company is by taking your total assets and subtracting the liabilities from that. And this is how you will come up with the owners equity, which is the third major part of a balance sheet.

Learn the steps needed to start a successful project

Here is a video in which I discuss the steps needed to start a new business or a project.

If you are in the planning stages of your particular business or nonprofit, check out this video on how to create a smart business plan with a strong strategy.

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