Sales forecasting becomes a key driver in the creation of pro forma statements.In this week's course materials, it is apparent that the sales forecast can be a challenge.Going back to week 1 discussion and the business that you might create or have created, explain how you might create a sales forecast.Discuss some of the challenges that might be faced with such a sales forecast.Be sure to remind your fellow classmates about your firm choice.

Again, while considering your own (current or potential) business, think about the expenses that you will have.Expenses can be variable (i.e. proportional to level of sales) or fixed (i.e., do not change with level of sales), or a combination of variable and fixed.DiscussAT LEAST 2 variable expenses and 2 fixed expenses that you believe will exist in your business.Do a little research and get a best estimate of the cost of these 4 expenses.Note that the work you do in this discussion will become important to your final project.

***Attached is the week 1 response in which the the type of firm is mentioned that needs to be discussed which is a coffee shop. Also attached is this weeks source links.

http://www.nfib.com/content/resources/money/the-importance-of-healthy-cash-flow-for-smallbusinesses-49882/ http://www.nfib.com/content/resources/money/3-ways-to-maintain-positive-cash-flow-in-a-downeconomy-56725/ http://www.entrepreneurshipsecret.com/effective-cash-management-a-must-have-for-small-businesses/ https://www.boundless.com/finance/textbooks/boundless-finance-textbook/financial-statements-taxesand-cash-flow-2/? https://www.khanacademy.org/college-careers-more/entrepreneurship2/interviews-entrepreneurs/tamccann/v/kauffman-ta-mccann2 http://www.freebookcentre.net/business-books-download/Small-Business-Management-in-the-21stCentury.html Describe what type of firm you are interested in forming or have already formed. One type of firm that I am interested in forming is a coffee shop. This would be a coffee shop that would offer the customers with the best coffee in the area complemented by some pastries and great customer service. Through opening a coffee shop, it's possible to create a unique environment where the where people can socialize in an environment that is relaxing and comfortable while enjoying the best brewed coffee and pastries. I am interested in this kind of business since there is a high demand of high quality coffee and great service in the community. By establishing a coffee shop, it will be possible to capitalize on the relatively large community in the area to build a core group of repeat customers. Also after work people like a relaxing environment here they can relieve their stress. Through a coffee shop it's possible to provide great ambiance, convenient location, friendly customer service and products of consistently high quality. Organizational form to choose The organization form that I would choose is the sole proprietorship. I would choose this organization form since it's the simplest form of business entity. Sole proprietorship form is used by 70 percent of the businesses in the US. One of the advantages with sole proprietorship is the formation simplicity. When forming a sole proprietorship business, very little paperwork is required. Only a small fee is required With a sole proprietorship it's possible to make all the key decisions concerning the business. This helps in taking control of the business. There are no formal meetings that are required as the case with other forms of business ownership or consultations. Sole proprietorship is ideal since one do not have to split the profit with other owners. A hundred percent of the profit goes to the owner. This can help in reinvesting the money back to the business so that it can expand There are tax advantages of forming a sole proprietorship business. According to the internal revenue service, the sole proprietorship businesses don't have to file separate tax returns for their business. The income that is made from the sole proprietorship business is treated as personal income and the owner has to pay tax based on the individual rate. Reasons for new business failure 2 threats that would be most relevant for the business Lack of cash flow and capital; there may be lack of enough capital that can be detrimental to the business. Lack of enough capital may mean that the business may not have enough cash flow to pay the bills, the loans and other financial commitments. This may make it difficult to grow the business and it may jeopardize the day to day operations of the business. No planning and poor management; poor management and planning is threat to the business. Poor planning and management may lead to making the wrong decisions. Lack of proper management can trickle down to all the aspects of the business. It can lead to poor financial management and poor employee management. Strategies to overcome each threat To overcome the lack of cash flow and capital, it will be important to first ascertain the amount of money that will be needed to cover up the startup costs and to keep the business running for the first and the second year. This will aid in proper planning and will ensure that the startup costs are met. High startup up loans will have to be avoided to avoid the cash flow problems so that the business can be able to meet all the cash requirements. To overcome poor management and planning, it will be important to first acquire skills that are needed to strengthen the managerial skills. A business plan will be important in the initial planning. Further it will be important to ensure there is proper short-term and long-term planning. Proper measurable goals need to be made and the right plan should include specific to-do lists with dates and deadlines. References Aileron. (2013). The Top Skills Every Entrepreneur Needs. Retrieved from https://www.forbes.com/sites/aileron/2013/11/26/the-top-skills-every-entrepreneurneeds/#23817a6976e3 DeMers. (2014). 5 Skills Every Successful Entrepreneur Must Master. https://www.entrepreneur.com/article/236128 Ecko. (2014). Failures are lessons for future success. Holman. (2011). "Reasons for New Business Failure and Success". Retrieved from https://www.youtube.com/watch?v=Lwm2i2st9Yw