Week 10 Reading Reflection

CH 11: Financial Preparation for Entrepreneurial Ventures

 The biggest surprise for me was the the importance or dependence on future statements. I guess I'm not necessarily surprised because entrepreneurs really need to consider future calculations and growth especially when a venture idea is still very much just an idea. But I guess I'm more confused, its hard for me to understand using different statements like a cash-flow budget, for instance. How can they survey the current inflows and outflows of the business if isn't even an organization yet? Or how can they survey these inflows and outflows just through research? Or do they conduct a mock cash-flow budget through experimenting with production and selling of products or services themselves? I guess if it is the last question I don't see how that can be effective, because that can waste a lot of capital if it turns out to be a bust. I am familiar with almost all the financial aspects through taking various business courses, but these were all shown to me when they were being utilized in an already functioning organization. I guess I'm questioning how you can conduct all these in the cases where a business is not yet generated. I don't think the author was incorrect in any sense, I only am having a hard time grasping the concept.