Definitive Business Plan, Second Edition, The

Varying views of the same numbers

Three views of financial transactions

You were promised a gentle start. So let me begin by stating the obvious. You are interested in the following three types of transactions.

1 Sales

In fact, you should be obsessed with sales volumes, selling prices and the direct cost of buying, developing or producing the items that you sell. This is what business is all about.

2 Capital outlays

These are primarily spending on productive assets with a life of more than one year; the secret to future income. I will talk mainly about fixed assets (such as plant, machinery and equipment), but the same considerations apply to any investment spending (such as when you takeover another company).

3 Operating costs

This is all other ...