Www.businessideaschallenege.co.uk Please be aware that this workshop is being video recorded for promotional purposes. Copyright University of Plymouth

www.businessideaschallenege.co.uk

Please be aware that this workshop is being video recorded for promotional purposes.

Copyright University of Plymouth. For permission to distribute or disseminate this

information, other than for personal use, please request permission from [email protected]

www.plymouth.ac.uk/bpchallenge


Finance and Accounts

Taster WorkshopPresented by Bernard CurrenKnowledge and Innovation

Manager



Start-up Costs

Personal Survival Budget

Cash Flow Forecast

Profit and Loss Forecast

Break Even Analysis

Financial Management

Sources of Finance

Finance and Accounts



What is the money for?

Starting the business

Working capital

Capital expenditur

e

Salaries/wages

Growing the

Business


Money…


Personal

relationshi

pRegul

ar informationNo surprises

From firms: keep to agreed borrowing levelsFrom banks: notification well in advance of changes in borrowing arrangements

From firms: accounts, budgets etcFrom banks: new facilities, rate charges etc

Regular contactTrust and respect

Banking Relationships



Frequent excesses on the account

Losses

Lack of financial information

Developing hard-core borrowing

Diminishing or rapidly increasing turnover

Declining margins

Inability to meet forecasts

Overreliance on too few customers or suppliers

Unavailable directors

Poor credit control

What Worries Bank Managers



Business purchase Franchise

LeasePurchase raw materials

Stock Purchase fixed assets

Re-develop business premises

Assist with cash flow (working

capital)

Insurances

Start-up Costs



Rent in advance, ingoing premium

Shop fitting, sign writing, power and telephone connectionVehicles, road fund licence and vehicle insurance

Advertising and promotion

Legal and other fees

Further costs to consider



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)

Start-up Costs



Personal Finance Loans Re-

mortgageOverdra

ft

Family and friends Grants Redund

ancy Equity

Trade Credit

Leasing and Hiring

Small Firm Loan

GuaranteePrime

Royal British Legion

Princes Youth Trust

How this can be funded…



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 forecast

Marketing Plan



Always remember

cash is King! More businesses fail through lack of cash

flow than lack of customers

Cash Flow



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

The cash flow forecast



PurposeTo 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)

MethodMatch sales income with the “cost” of

producing that income

The Profit and Loss Forecast



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

500 1000 1500

Breakeven Chart

0

45

40

35

30

25

20

10



Asset register

Sales record

Purchase record• Analysis book• All in one accounts book• Computer based system

Record every transaction and asset acquisition with receipts

Keep personal finances separate

Business bank accounts

Bookkeeping




Professional Support

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 0845 6009966

http://www.businesslink.gov.uk/bdotg/action/home?tc=000KWBL200230110007&domain=www.businesslink.gov.uk&target=http://www.businesslink.gov.uk/


To find out more about the Business Ideas Challenge 2009/10 or to view the video

recording of this presentation visit www.plymouth.ac.uk/bpchallenge

or if you have an enquiry please contact [email protected]


http://www.plymouth.ac.uk/bpchallenge

mailto:[email protected]

Documents

Www.businessideaschallenege.co.uk Please be aware that this workshop is being video recorded for promotional purposes. Copyright University of Plymouth