Our top tips for creating your Cash Flow Forecast:

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Our top tips for creating your Cash Flow Forecast:

If this figure is negative, it means that you are anticipating your expenses will be greater than your revenue in that period; conversely, if the figure is positive, it means you are anticipating your revenue to be greater than your expenses and to deliver a profit.

If you use our free template, your net cash flow for each month and for the year as a whole will be automatically calculated for you.

Be realistic in terms of how many sales you expect to make While it is great to be ambitious for your business, it’s important to be realistic. Particularly in the early stages of trading, you may find that you aren’t able to make as many sales while you’re focusing on building up awareness about your product or service. It’s always better to make conservative estimates and over exceed your targets, than find yourself over committed or under prepared.

  • Revenue, or income, is any money your business generates. In a product-based business, this is likely to be made up of the sales of different products. You may like to include separate line items for your individual products or product categories, particularly if each product contributes a significant amount of revenue.
  • Expenses, or costs, are the items you’ll need to pay for in order to produce and/or deliver your products or services, promote and manage your business.

These tips have been prepared by our Business Advisers and loan assessment team to help you understand some of the key things that will strengthen your application:

  • A recurring cost is one that doesn’t change over the course of the forecast. For example, your premises rent, insurance and Start Up Loan Ohio bad credit personal loans repayments etc.
  • An ad hoc cost is one that changes according to your needs. For example, supplier costs, material costs, venue hire, printing and travel expenses etc.

Plan for seasonality and base your figures on a range of typical scenarios (like quiet or busy periods) Seasonality doesn’t affect everyone in the same way. For example, if you’re starting a business in an area that has a booming tourist economy in the summer months but is very quiet during winter, this should be reflected in your forecasted sales figures and costs. But even if seasonality doesn’t affect you in this way, every business goes through quiet periods (with less sales) and busy periods (with more sales). Depending on your fixed and variable costs, this may create more or less pressure on your cost base during this period.

Think about the promotional activities you’ve got planned and the sales you expect these to generate. If you expect one of your promotional campaigns to deliver a high volume of new sales during a key month, you should try and reflect this in your numbers. Equally, if there are certain periods where you won’t have a large marketing budget in place, think about the impact this is likely to have on your sales.

These tips have been prepared by our Business Advisers and loan assessment team to help you understand some of the key things that will strengthen your application:

  • The salary you will require from the business If you will not be earning any other forms of income while you start and grow your business you are likely going to need to draw on some of your business earnings to support yourself. The minimum salary you require needs to be included in your cash flow forecast as one of your expenses, along with any other staff salaries. Use our Personal Survival Budget guide and template to help calculate this.

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