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Start-up CostsPersonal Survival BudgetCash Flow ForecastProfit and Loss ForecastBreak Even AnalysisFinancial ManagementSources of Finance

What is the money for? Starting the business Working capital Capital expenditure Salaries/ wages Growing the Business

Personal relationship Regular information No surprises From firms: keep to agreed borrowing levels From banks: notification well in advance of changes in borrowing arrangements From firms: accounts, budgets etc From banks: new facilities, rate charges etc Regular contact Trust and respect

Frequent excesses on the accountLossesLack of financial informationDeveloping hard-core borrowingDiminishing or rapidly increasing turnoverDeclining marginsInability to meet forecastsOverreliance on too few customers or suppliersUnavailable directorsPoor credit control

Business purchase FranchiseLease Purchase raw materials Stock Purchase fixed assets Re-develop business premises Assist with cash flow (working capital) Insurances

Rent in advance, ingoing premium Shop fitting, sign writing, power and telephone connection Vehicles, road fund licence and vehicle insurance Advertising and promotion Legal and other fees

Be realistic when estimating these costs Don’t turn a blind eye to them, these are genuine costs You have to find the money, its often pre-start- up, (before trading commences)

Personal Finance Loans Re- mortgage Overdraft Family and friends GrantsRedundancyEquity Trade Credit Leasing and Hiring Small Firm Loan Guarantee Prime Royal British Legion Princes Youth Trust

Personal Survival Budget This is the minimum take you have from the business The Business Plan will need to sustain this overhead The PSB links with the following documents Business pricing structure Cash flow forecastMarketing Plan

This important document helps to: Establish the amount of money required and when it is needed Ensure that capital expenditure is controlled Encourage efficient use of resources Identify any shortfalls Provides facts to help with decision- making

Purpose To assess the profitability of a business over a given period of time Format Sales - Cost of Sales = Gross Profit Gross Profit – Overheads = Net Profit /(Loss) Method Match sales income with the “cost” of producing that income

Preparing the Profit and Loss Forecast Sales forecast produced from market research, marketing plan, pricing policy and assumptions Sales – Cost of Sales = Gross Profit Cost of sales produced from suppliers prices, unit costs and assumptions Overhead budget produced from known costs, anticipated additional costs and assumptions Gross Profit – Overheads = Net Profit / (Loss)

Pounds Sales Volume Total Revenue line Total Cost line Losses Fixed Cost Total Variable Cost Breakeven Point Profits

Asset registerSales record Analysis book All in one accounts book Computer based system Purchase record Record every transaction and asset acquisition with receipts Keep personal finances separateBusiness bank accounts

Accountant Familiar with small businesses Recommend a bookkeeping system Clear about what they will charge you What’s the alternative? Solicitor Strong commercial experience Member of ‘Lawyers for Business’ scheme Business Advisor Business Link

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