Transcript Document

Please be aware that this workshop is being
video recorded for promotional purposes.
Copyright University of Plymouth. For
permission to distribute or disseminate this
information, other than for personal use,
please request permission from
[email protected]
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Finance and
Accounts
Taster Workshop
Presented by Bernard Curren
Knowledge and Innovation
Manager
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Finance and Accounts
Start-up Costs
Personal Survival Budget
Cash Flow Forecast
Profit and Loss Forecast
Break Even Analysis
Financial Management
Sources of Finance
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Money…
What is the
money for?
Starting the
business
Working
capital
Capital
expenditure
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Salaries/
wages
Growing
the
Business
Banking Relationships
Personal
relationship
Regular contact
Trust and respect
Regular
information
No
surprises
From firms: accounts,
budgets etc
From banks: new
facilities, rate charges
etc
From firms: keep to agreed
borrowing levels
From banks: notification well
in advance of changes in
borrowing arrangements
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What Worries Bank Managers
Frequent excesses on the account
Losses
Lack of financial information
Developing hard-core borrowing
Diminishing or rapidly increasing turnover
Declining margins
Inability to meet forecasts
Overreliance on too few customers or suppliers
Unavailable directors
Poor credit control
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Start-up Costs
Business
purchase
Franchise
Lease
Purchase fixed
assets
Stock
Purchase raw
materials
Re-develop
business
premises
Assist with cash
flow (working
capital)
Insurances
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Further costs to consider
Rent in advance, ingoing premium
Shop fitting, sign writing, power and telephone
connection
Vehicles, road fund licence and vehicle
insurance
Advertising and promotion
Legal and other fees
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Start-up Costs
Be realistic
when
estimating
these costs
Don’t turn a
blind eye to
them, these are
genuine costs
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You have to find
the money, its
often pre-startup, (before
trading
commences)
How this can be funded…
Personal
Finance
Loans
Remortgage
Overdraft
Family and
friends
Grants
Redundancy
Equity
Trade Credit
Leasing and
Hiring
Small Firm
Loan
Guarantee
Prime
Royal British
Legion
Princes
Youth Trust
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Personal Survival Budget
This is the
minimum take
you have from the
business
Cash flow forecast
The Business Plan
will need to
sustain this
overhead
Business pricing
structure
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The PSB links with
the following
documents
Marketing Plan
Cash Flow
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The cash flow forecast
This important document helps to:
Establish
Ensure that
Encourage
the amount
capital
of money
efficient
expenditure
use of
required
is
and when it
resources
controlled
is needed
Identify any
shortfalls
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Provides
facts to
help with
decisionmaking
The Profit and Loss Forecast
Purpose
To assess the
profitability of a
business over a given
period of time
Format
• Sales - Cost of
Sales = Gross
Profit
• Gross Profit –
Overheads = Net
Profit /(Loss)
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Method
Match sales income
with the “cost” of
producing that
income
Preparing the
Profit and Loss
Forecast
Sales forecast produced
from market research,
marketing plan, pricing
policy and assumptions
Cost of sales produced
from suppliers prices,
unit costs and
assumptions
Sales – Cost of Sales =
Gross Profit
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Overhead budget
produced from known
costs, anticipated
additional costs and
assumptions
Gross Profit –
Overheads = Net Profit
/ (Loss)
Breakeven Chart
Pounds
Total Revenue
line
Profits
45
Breakeven
Point
40
Total Cost line
35
30
Losses
Total Variable Cost
25
Fixed
Cost
20
10
0
500
Sales Volume
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1000
1500
Bookkeeping
Asset register
Sales record
Purchase record
• Analysis book
• All in one accounts book
• Computer based system
Record every transaction and asset acquisition with receipts
Keep personal finances separate
Business bank accounts
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Professional Support
Accountant
Solicitor
• Familiar with
small businesses
• Recommend a
bookkeeping
system
• Clear about what
they will charge
you
• What’s the
alternative?
• Strong
commercial
experience
• Member of
‘Lawyers for
Business’ scheme
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Business Advisor
• Business Link
0845 6009966
To find out more about the Business Ideas
Challenge 2009/10 or to view the video
recording of this presentation visit
www.plymouth.ac.uk/bpchallenge
or if you have an enquiry please contact
[email protected]
www.plymouth.ac.uk/bpchallenge
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