ASSES YOUR FINANCES


ASSES YOUR FINANCES

First create a financial business plan


•Start with a sales forecast. Set up a spreadsheet projecting your sales over the course of three years. Set up different sections for different lines of sales and columns for every month for the first year and either on a monthly or quarterly basis for the second and third years.


•Create an expenses budget. You're going to need to understand how much it's going to cost you to actually make the sales you have forecast


•Develop a cash-flow statement. This is the statement that shows physical dollars moving in and out of the business. You base this partly on your sales forecasts, balance sheet items, and other assumptions  


•Income projections. This is your pro forma profit and loss statement, detailing forecasts for your business for the coming three years. Use the numbers that you put in your sales forecast, expense projections, and cash flow statement. "Sales, lest cost of sales, is gross margin," Berry says. "Gross margin, less expenses, interest, and taxes, is net profit."


•Deal with assets and liabilities. You also need a projected balance sheet. You have to deal with assets and liabilities that aren't in the profits and loss statement and project the net worth of your business at the end of the fiscal year. Some of those are obvious and affect you at only the beginning, like startup assets. A lot are not obvious. "Interest is in the profit and loss, but repayment of principle isn't," So the way to compile this is to start with assets, and estimate what you'll have on hand, month by month for cash, accounts receivable (money owed to you), inventory if you have it, and substantial assets like land, buildings, and equipment. Then figure out what you have as liabilities--meaning debts. That's money you owe because you haven't paid bills (which is called accounts payable) and the debts you have because of outstanding loans.


•Breakeven analysis. The breakeven point, is when your business's expenses match your sales or service volume. The three-year income projection will enable you to undertake this analysis. "If your business is viable, at a certain period of time your overall revenue will exceed your overall expenses, including interest." This is an important analysis for potential investors, who want to know that they are investing in a fast-growing business with an exit strategy.



Do you have access to the funds you are going to need to start a business?

Quite simply do you have the money it is going to take to develop and promote your idea?  If not where are you going to get the money?  How much is it going to cost?  

It is never a good idea to start a business with a high interest loan or on a credit card.  If you must ensure you have done your figures and have worked out you can repay the money within the first 3 months of trading and have another income to support the loan if your figures are wrong.  This of course can't be guaranteed but it is a helpful way of looking at things.

There are a range of places to borrow money but the cheapest and most obvious one is the redraw on your mortgage if you have one.  The other although complicated is family.  

There are also places online where you can borrow up to $5000 - $1000 with very little security.  

UP TO $5,000 WALLET WIZARD:- https://www.walletwizard.com.au/ 

UP TO $10,000 ZIPMONEY:- https://zipmoney.com.au

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