Cash Flow Forecast

Create a Cash Flow Forecast

1. Identify all sources of income: List all the sources of income that the business is expected to receive, such as sales, investments, loans, and grants.

2. Establish a timeline: Decide on a timeline for the forecast, such as weekly, monthly, or quarterly.
   
   

3. Project expenses: Make a list of all expected expenses, including fixed costs such as rent and salaries, and variable costs such as supplies and marketing
   
   

4. Forecast incoming cash: Estimate the amount of money that will come into the business based on sales projections and other sources of income.
   
   

5. Forecast outgoing cash: Estimate the amount of money that will be spent on expenses during the same period.

6. Track actual results: Compare the actual results to the forecast and make adjustments as necessary. Repeat this step regularly to continuously improve the accuracy of the forecast.

7. Use a spreadsheet: To keep track of your cash flow forecast, it is best to use a spreadsheet program such as Microsoft Excel or Google Sheets.

Types of business expenses

Small businesses typically have a variety of expenses, including:

• Operating expenses: This includes everyday costs like rent, utilities, office supplies, and insurance.

• Employee salaries and benefits: This includes salaries, bonuses, health insurance, and other benefits for employees.

• Marketing and advertising: This includes costs for advertising, promotions, and other marketing activities.

• Stock: This includes the cost of goods sold and any stock storage costs.

• Technology: This includes the cost of hardware, software, and internet services.

• Professional services: This includes expenses for legal, accounting, and other professional services.

• Travel and entertainment: This includes costs associated with business-related travel and entertainment expenses.

• Loan and debt payments: This includes any payments on loans and other debts.

• Maintenance and repairs: This includes the cost of maintaining and repairing equipment, vehicles, and other assets.

These expenses may vary depending on the specific needs and operations of the small business, and it's important for business owners to accurately track and manage these expenses to ensure the financial health of their business.

Detailed expenses

Here is a more detailed list of business expenses you may incur when running a business:

1. Rent or Mortgage Payments: If you have a business premises, you will need to pay rent or mortgage payments. This includes any utility bills, such as electricity and gas, that are associated with running the property.

2. Insurance: You may need to pay for various types of insurance, including employer's liability insurance, public liability insurance, and product liability insurance.
   
   

3. Business Rates: Business rates are a tax that is charged on most non-domestic properties. They are based on the rateable value of the property and the location.
   
   

4. Salaries and Wages: You will need to pay your employees a salary or wage, and you will also need to pay National Insurance contributions.
   
   

5. Employee Benefits: If you provide employee benefits, such as health insurance or pension contributions, these will also be a cost to your business.
   
   

6. Equipment and Supplies: You may need to purchase equipment, such as computers or machinery, and supplies, such as raw materials or office supplies.
   
   

7. Marketing and Advertising: You will need to spend money on marketing and advertising to promote your business. This includes things like website design, advertising campaigns, and social media advertising.

8. Professional Fees: If you use the services of a professional, such as an accountant or a lawyer, you will need to pay for their services.
   
   

9. Training and Development: You may need to invest in employee training and development, including training courses and workshops.

10. Travel Expenses: If you or your employees need to travel for business purposes, you will need to cover the cost of travel, including transportation, accommodation, and meals.
    
    

11. Taxes: You will need to pay various taxes, including income tax, corporation tax, and value-added tax (VAT).

12. Renting Office Space: If you do not own a business premises, you may need to rent office space.
    
    

13. Software and Subscriptions: You may need to pay for software and subscriptions for various business tools and services, including accounting software, project management tools, and communication tools.
    
    

14. Licenses and Permits: Depending on your industry, you may need to obtain licenses and permits to operate your business.
    
    

15. Legal Fees: You may need to pay for legal fees, including those associated with setting up your business, contracts, and intellectual property

Types of business income

Small businesses typically have a variety of income sources, including:

1. Sales of goods and services: This is the primary source of income for many small businesses and includes the sale of products and services to customers.
   
   

2. Investment income: This includes interest and dividends earned from investments.
   
   

3. Rent: This includes income received from renting out property or equipment.
   
   

4. Grants: This includes funds received from government or private
   organisations for specific projects or initiatives.
   
   

5. Loans: This includes loan repayments received from borrowers.
   
   

6. Royalties: This includes payments received for the use of intellectual property, such as patents or trademarks.
   
   

7. Affiliate marketing: This includes commission-based income earned from promoting products or services from other businesses.
   
   

8. Online advertising: This includes income from advertising on websites, social media platforms, or other online channels.

These income sources may vary depending on the specific operations and focus of the small business, and it's important for business owners to continually evaluate and diversify their income streams to maintain stability and growth.