Starting up:
Financial forecasts
Before setting up your business you should ensure that your business has enough working capital to survive. When setting up a business you often need to incur a significant level of expenses that need to be paid before you receive any income from your sales, and so cash flow is often a problem. We recommend that you prepare the following financial forecasts to translate what you've said about your business into numbers:
- Sales forecasts to show the amount of money you expect to raise from sales, from commencement and projected forward, making full use of marketing survey data;
- Profit and loss forecasts to show the trading position of the business by calculating the level of profit you expect to make, given your projected sales, the costs of providing goods and services and your overheads; and
- Cashflow statements to estimate your cash balance and movement by month for at least the first year to 18 months. You need be realistic about how long it will take for your customers to pay and how much credit you will be allowed from your suppliers.
We can help you prepare these forecasts, should you wish.
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Where next?
Within Developing your business idea…
- Your business, its products and services
- Your market, competitors and sales and marketing strategy
- Your management and operations
- Presenting your plan
Within Starting up ...
- Your business structure
- Setting up
- Accounting systems
- Payroll and PAYE
- National Insurance contributions
- VAT
- Income tax
- Corporation tax
General ...
- Contact us about this issue
- Read about how we can help you & your family
- Request a meeting with us
