- Update your cash flow Forecast(how will you spend your money)
- Adjust your marketing to increase sales (market your productions to meet sales predictions)
- Make contracts (Make sale)
- Invoice your clients (recieve money)
- Send reminder (if unpaid, send reminder)
We then addressed what exactly is a cash flow and what can you learn from it? well there are 3 steps to a cash flow:
- Receipts (This is your income)
- Payments (This is your Expenditure)
- The Blanace (The value of you income minus the value of your expenditure)
It's important to make a cash flow forecast when starting up a business as it gives you a rough estimation of what you'll be spending your money on such as payment for employees, rent for your building and various other aspects that require money to run a business, always consider costs and groth and never be afraid to ask for help from a Certified accountant. Don't get confused as there are two types of accountants, Charted and Certified, more often than not, Charted accountants are very expensive but don't really do anything different to Certified accountants.
It's important to know the types of documents you'll be handeling when running a business, often these documents will be invoices and statements:
- Estimate (Quote)
- Invoice (Bill, has name, date, items/service and total cost)
- Statement (reminder for any missing payments)
- Cancels and Returns
So what do businesses spend their money on? more often than not there are start up costs, overheads (fixed costs) and direct costs, tehese are listed below:
Start up Costs:
- New Equipment
- Company Name
- Launch Party (Optional)
- Bills (rent, power, wages)
- Any spendature realting to the project (this is a variable amount, eg Computers for designers)
- Marketing plan
- How much money needed?
- How much money do you have?
- How will you spend your money?
- (If borrowing) How will you pay the money back?