Financial Planning
When you carry out your financial planning, it is important to keep your personal finances and assets clearly separate from your business. It is also important to have a contingency plan in case income from your business fails to cover the business costs and/or salary costs.
A key activity before starting up in business is to identify all the items that will need to be paid for along with detailed and realistic estimates of how much these will cost.
You will need to include both:
- direct costs – the costs of materials, labour and equipment.
- indirect costs – the overheads associated with running a business – rent & rates, advertising, accountancy, etc.
You all also need to produce an estimate of the projected sales income from your business. Please go to the forecasting and planning your sales pages| for help with this activity.
Once you have a detailed cost of starting and running your new business, you can then determine how these costs will be financed. Please go to the finance pages for more information about financial planning tools such as Cashflow, Profit and Loss Accounts and Balance Sheets. This section also provides information about sources of finance.
All this financial information will make up parts of your business plan. See the business plan pages| for help with this.
Please also go to www.businesslink.gov.uk| for more information, tools and case studies.