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JC Business Plan

JC Planning the Business-Cash Flow Forecast

What is a Business Plan? A business plan is a document that shows the current state of the business, the goals the business are aiming for and the methods they will use to achieve them.
What are the key sections in a Business Plan? 1. The Business (company details) 2. Key Personnel 3. Product/Service and the Marketplace (marketing) 4. Fixed Assets of the Business 5. Finance.
What is found in the first section of the business plan? The Business (company details) includes: Name and address of business, legal structure of the business (sole trader/limited company), the main objectives of the business.
What is found in the second section of the business plan? Key Personnel: Details about the people who set up the business, including the amount of money they each invested in the business.
What is found in the third section of the business plan? Product/service and the marketplace: Details about the product or service provided by the business, their customers, the firm's main competitors and how the firm advertises and sells their product/service.
What is found in the fourth section of the business plan? Fixed Assets of the business: Details about the premises used by the business, all other fixed assets owned by the firm, such as equipment and motor vehicles.
What is found in the fifth section of the business plan? Finance: Details about any existing loans that the business has, the amount of additional finance required and the purposes for which the finance is required and how the finance is to be repaid.
What is a cash flow forecast? A plan showing all the expected cash receipts (income) and cash payments (expenditure) in a firm over a period of time.
What is included in a cash flow forecast? 1. expected income of the firm over a period of time. 2. expected costs of the firm (fixed and variable). 3. The firms expected net cash (income minus expenditure). 4. The firm's opening and closing cash each month.
Why prepare a cash flow forecast? To show your ability to pay bills during a particular period. To show the months where you might find yourself short of cash. To show the months where you might have a surplus of cash available to spend.
What happens if the Cash Flow Forecast show a deficit? You should try and find out what is causing the deficit. You should take steps to solve the problem; you could earn additional income by increasing sales, reduce your overheads (electricity, fuel...), get better prices and costs from your suppliers.
What are fixed costs? Costs that do not change as the volume of goods produced or sold changes. Examples; rent, mortgage, cost of the delivery van, the cost of a computer and the repayments on a term loan.
What are variable costs? Costs that change depending on how much business the firm is doing. The amount might change each month. Ex: wages, materials, electricity, telephone calls etc.
Calculating Net Cash Total Receipts - Total Payments
Calculating Closing Cash Net Cash + Opening Cash
Created by: MrFromholz



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