I feel incredibly dumb for asking this question, and I've put it off for months while getting a business plan and financial projections mostly in order. Well, at this point I still haven't figured it out to my satisfaction.
Inventory such as grains, hops, yeast buys, etc. We'll need to purchase these things periodically. I've accounted for an initial buy for 6 months worth of such inventory into startup costs. Beyond that, I don't have any further inventory buys included in my financial projections. Seems like a problem to me. I also don't know where I would include that information (guessing not the projected income statement, probably the projected cash flow statement and projected balance sheet).
I have good estimates of the costs involved in producing a batch, so I already know how much I'm spending when producing a batch. I'm accounting for those ingredient costs in my income statement and cash flow already (as cost of sales) so part of me thinks that's enough. The other part of me isn't satisfied because it feels like I'm only providing estimates for inventory when I need it, not before I need it. Obviously, if I can't properly estimate that the cash will be on hand for ingredients prior to making the batch, we might find ourselves being unable to make a batch.
Inventory such as grains, hops, yeast buys, etc. We'll need to purchase these things periodically. I've accounted for an initial buy for 6 months worth of such inventory into startup costs. Beyond that, I don't have any further inventory buys included in my financial projections. Seems like a problem to me. I also don't know where I would include that information (guessing not the projected income statement, probably the projected cash flow statement and projected balance sheet).
I have good estimates of the costs involved in producing a batch, so I already know how much I'm spending when producing a batch. I'm accounting for those ingredient costs in my income statement and cash flow already (as cost of sales) so part of me thinks that's enough. The other part of me isn't satisfied because it feels like I'm only providing estimates for inventory when I need it, not before I need it. Obviously, if I can't properly estimate that the cash will be on hand for ingredients prior to making the batch, we might find ourselves being unable to make a batch.
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