[HuggyBear]

OK, i just completed my cash flow forecast for year 1 in excel, IMO business doesnt seem to bad - but then again I am a business n00b

I would appreciate it if somebody could just look at the totals and tell me if a bank would accept the forecast?

Can be seen in pdf at:
http://shaunrigby.co.uk/CashflowForecast-Overview.pdf

Thanks

[Peter W]

Hi Shaun

The bank are likely to be looking at:

What is the 'Funding from other sources'? Are you not putting in any of your own money? The banks hate that.

On what basis have you forecast those sales?

Every month you have got more cash going out than coming in. When is this going to reverse, and how?

What money are you taking from the business? If it is the 'Employee costs', it would be better to show it as drawings.

At the moment, it doesn't look too good...

[IP2]

First thought...I am still looking...

I assume you have credit facilities with your suppliers, you have not factored that in.

More in a mo...

[IP2]

OK scrap the Princes Trust lines...where did you get this!?

First thing I would want to know if I was investing in you is how this advertising budget works...somehow you have huge growth in the first six months on a very limited budget, then sales plateau with the same budget, why?

[IP2]

Originally Posted by IP2

OK scrap the Princes Trust lines...where did you get this!?

First thing I would want to know if I was investing in you is how this advertising budget works...somehow you have huge growth in the first six months on a very limited budget, then sales plateau with the same budget, why?

I won't wait for the answer, I am going to tell you why! Because at that plateau you have reached the level of business you need to make the model work.

Sorry mate, but that won't impress an investor or a bank...you would be better off showing a slower growth and reaching break even in year 2 or 3...

[IP2]

OK...I don't wish to give you a hard time, but not sure how you are taking payments...add to your banking costs £30 a month if taking cash and putting it into a high interest account add approx £100 if taking credit cards and cash and paying it into a standard business account.

Heat light and water...sounds on the optimistic side to me...£60 per month, giving you the benefit of the doubt...but you may get called on this...and any investor, bank or otherwise that can start to pull wholes will get far less secure and far less prepared to risk on you.

[HuggyBear]

Hiya mate,

I got the forecast from the Prince's Trust business plan template thing and copied it into excel - hence the princes trust lines

Peter, The sales forecast was based purely on my knowledge and experience in the sector, how would I go about actually researching when a computer would break?
The funding from other sources is for example a bank loan, but I doubt the bank would lend me the full £30k

IP2, I thought the VAT registration threshold was £67k? If my forecast was right sales would only reach £41? or does the loan(s) have to be included as well? this is why I havent accounted for VAT. I also plan to actually do a 3 year forecast but it is looking like I am going to have to incease the profit margins...

I have the full illustration available if you want to look into it in some detail?

PM me and I shall mail it across

Thanks guys...

[IP2]

You are perfectly correct about the VAT threshold and I edited my post on that, probably crossed with your post, but do make sure you factor it in when appropriate, seen many new businesses forget to and it leaves an embarrassing moment when a bank raises it!

Feel free to PM me the whole thing HuggyBear, I will be critical, but I figure you know that and better to hear it from me than be in front of the bank manager!

[Peter W]

Originally Posted by HuggyBear

Peter, The sales forecast was based purely on my knowledge and experience in the sector, how would I go about actually researching when a computer would break?

I know it's often difficult, but you should try to offer some explanation of how the sales were forecast, however weak. At the very least, it shows that you have properly thought about it. Otherwise, you are just picking figures out of thin air.

[IP2]

Originally Posted by Peter W

I know it's often difficult, but you should try to offer some explanation of how the sales were forecast, however weak. At the very least, it shows that you have properly thought about it. Otherwise, you are just picking figures out of thin air.

I don't know about you Peter, but I get quite a few of these each month and you learn not to trust them, I have no idea why banks pay so much credence to them, but we both know they do. A good bank understands their limitations and loans when it feels a vibe, a bad bank never understands these figures in the first place...no wonder we have a credit crunch!