Originally written by Matthew Cushen on Small Business
As a start-up or small business, what are you funding choices? And the consequences of those choices?
Can you afford the time that it could take to grow the business organically – limiting the upfront cash and reinvesting revenue? Or do you need to develop the product/service quickly, chuck cash at marketing, get the brand in front of people, grow quickly and grab market share before others?
Do you have some personal cash to keep you going or are you going to need to pay yourself a salary before the business is generating enough cash to cover it? Are you going to recruit and pay others? Probably the most stressful aspect of building a team is ensuring you can meet payroll each month.
‘If you aren’t a natural spreadsheet warrior then find someone who is that can help’
How to create a cash flow forecast
To answer these questions you need a cash flow forecast, and ideally some comparisons across some different scenarios.
The high investment/fast growth scenario, the slow burn scenario, the optimistic scenario and the worst-case scenario where you don’t manage to generate any of the expected revenue and cash is flowing one way. A cash flow
Tag Archive for Cash Flow
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7 funding choices when it comes to financing your start-up
by Matthew Cushen • • 0 Comments
Originally written by Matthew Cushen on Small Business
As a start-up or small business, what are you funding choices? And the consequences of those choices?
Can you afford the time that it could take to grow the business organically – limiting the upfront cash and reinvesting revenue? Or do you need to develop the product/service quickly, chuck cash at marketing, get the brand in front of people, grow quickly and grab market share before others?
Do you have some personal cash to keep you going or are you going to need to pay yourself a salary before the business is generating enough cash to cover it? Are you going to recruit and pay others? Probably the most stressful aspect of building a team is ensuring you can meet payroll each month.
‘If you aren’t a natural spreadsheet warrior then find someone who is that can help’
How to create a cash flow forecast
To answer these questions you need a cash flow forecast, and ideally some comparisons across some different scenarios.
The high investment/fast growth scenario, the slow burn scenario, the optimistic scenario and the worst-case scenario where you don’t manage to generate any of the expected revenue and cash is flowing one way. A cash flow
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Is Now the Right Time to Start a Business, and How Can I Manage My Cash Flow?
by Entrepreneur Staff • • 0 Comments
These financial advisors respond to viewer questions and help you decide what’s right for your business.
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Two out of five small businesses will run out of cash within six weeks
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Two out of five small businesses expect to run out of cash with six weeks, according to a new survey.
And one in five small businesses say they will run out of cash within three weeks.
Small business revenues are set to decline by an average 60 per cent in April, with 69 per cent of businesses in leisure and hospitality expecting revenue to totally disappear.
>See also: Nearly 1m businesses on brink of collapse, warn accountants
Three quarters of small business say that coronavirus has already badly affected their business, and this looks set to worsen in April. Eighty per cent say their income will continue to decline this month, with more than one in three (36 per cent) expecting income to crash by more than 90 per cent.
Retail is the second-most badly affected sector, with 38 per cent of small business retailers expecting their income to totally disappear.
Businesses in IT and telecoms expect to be least impacted, with just under a quarter (23 per cent) saying they don’t expect to see any decline in their revenue compared to April last year.
If small business revenue does decline overall by 57 per cent as expected, this equates
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6 tips for cash flow management during the coronavirus crisis
by Mark Perrin • • 0 Comments
Originally written by Mark Perrin on Small Business
As many small businesses shut up shop or adopt new ways of working during the coronavirus pandemic, many are struggling to grasp the package of support measures that had been made available by chancellor, Rishi Sunak.
Among the most significant developments over the past week was the announcement of a new Job Retention Scheme, aimed at helping employers to keep on staff, even if they have no work for them to do.
Employers who commit to keeping such staff on the payroll, can classify them as ‘furloughed workers’ and will be eligible for a grant to meet the cost of 80pc of the worker’s salary, up to a maximum of £2,500, for up to three months.
> See also: Government launches business Coronavirus Job Retention Scheme
However, significant areas of concern remain for employers’, including those working flexible or reduced hours, or employed on zero-hours contracts. News is mixed here as, while the Treasury promises an averaging arrangement to determine the salary of zero hours workers, they have confirmed that the rules will not apply to an employee who continues to work reduced hours.
Further uncertainty centres on the use of self-employed contractors. Workers who fall inside this bracket
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Working capital explained: a guide for online marketplace businesses
by Partner Content • • 0 Comments
Originally written by Partner Content on Small Business
If you run an online marketplace business, you’ll be familiar with the concept of working capital
Whether you have multiple listings on Amazon or a boutique store on Etsy, ensuring a steady flow of working capital is essential for long-term retail success. Marketplace sellers that find themselves short on cash will struggle to replenish stock, fail to fulfill orders, and see their product rankings slowly slip away.
But even for successful merchants, the task of maintaining adequate levels of working capital isn’t always easy. Unexpected costs relating to seasonal demand, spoiled stock, disrupted supply chains (yep, we’re thinking of coronavirus), late delivery and more can quickly add up. And merchants oriented towards growth face the added challenge of balancing medium and long-term investments with day-to-day costs.
In this post, we’re going to take a look at the concept of working capital, how to implement sustainable practices, and which solutions are on offer to help businesses that need a boost.
What is working capital?
The term ‘working capital’ refers to a company’s current (liquid) assets minus any current liabilities, like upcoming invoices.
For most companies, working capital is essentially the amount of cash in their business account combined with the
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Small businesses using loans to manage cashflow, instead of investing
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Small businesses are mostly taking out loans to manage their cashflow rather than investing in their companies, according to research.
Almost 40 per cent of small businesses that borrowed money in the last quarter of 2019 used cash to keep going rather than invest in their firms, says the Federation of Small Businesses.
This compared with 23 per cent using finance to update equipment, 16 per cent to expand their business or just 2 per cent for hiring staff.
>See also: Small businesses spend hour and a half each day chasing late payments
That small business is using external finance to cover outstanding invoices highlights the late payment crisis, says the FSB. The latest figures from Pay.UK show that the balance of outstanding late payments almost doubled to £23bn in 2019.
And applications for external finance dropped off in Q4 as the share of firms describing credit as “unaffordable” rose, despite more being offered at sub 4 per cent lending rates.
Mike Cherry, national chairman of FSB, said: “It’s troubling that so many external finance applications are driven by cashflow concerns. You wouldn’t dream of doing your weekly shop and telling the cashier that you’ll pay for it in
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SME owners have pumped £12k of their own cash into their businesses
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
Entrepreneurs have put almost £12,000 (£11,846.45) of their own money into their businesses on average, according to new research.
Worryingly, 2.6m business owners admit to having concerns about the future – a quarter even believe that their business will go under in the next five years.
These findings come from Business Rewired, a report by Xero looking at the greatest concerns for SME owners in the future. The most prominent worries are:
Receiving payments late54pc
Tax rates for small businesses44pc
Uncertainty of Brexit44pc
Value of the pound40pc
Maintaining or increasing levels of productivity31pc
Increasing cost of importing goods/materials30pc
Cyber attacks/cost of protection against them27pc
Rising cost of rent25pc
Attracting high calibre employees24pc
Cost of running a green/sustainable business23pc
Failure to meet demand23pc
Retaining staff21pc
Increasing cost of exporting products19pc
Inflexible employee contracts19pc
Cost of staff recruitment19pc
Staff going on annual leave17pc
Pressures like these have affected the mental health of more than a third of respondents, with small business owners working an extra nine hours per week on average on top of their standard working hours.
Optimism in the industry
Despite a dismal year for SMEs, experts believe that the emergence of AI will ease the strain on exhausted business owners.
Gerd Leonhard, business futurist and contributor to the report, says:
“Automation is reducing the need
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Learn the essentials of cash flow management and maximising revenue
by Partner Content • • 0 Comments
Originally written by Partner Content on Small Business
To celebrate small businesses, SAP Concur is having its own National Small Business Week from 3rd-7th June 2019.
Over the week it’ll be hosting two webinars – one on managing cash flow and the other on maximising revenue. Both webinars are 45 minutes long.
Webinar 1: the critical role of cash flow management for business success
Tuesday 4th June 2019, 10am BST
This session will look at:
Advanced visibility of spend
Growth strategies
Affordable automation
Customer insights from Devon Air Ambulance
Webinar 2: maximising revenue: accounts payable automation tips and tricks
Wednesday 5th June 2019, 10am BST
The webinar will cover:
SaaS for small business
Automation tips and tricks
ROI expectations
Customer insights from Harrow School
You can get involved by filling in your details on SAP Concur’s website. The firm is offering 20% off quotes created before 7th June 2019.
SAP Concur will also be supporting the charity, End Youth Homelessness (EYH). It helps young people to find a home and work towards a way of sustainable living, focusing on personal growth, career and education goals.
Find out more at SAP Concur’s National Small Business Week website.
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Ten ways to improve cash flow
Learn the essentials of cash flow management and maximising revenue
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This Payment Model Will Keep Clients Satisfied and Bank Accounts Full
by Drew McLellan • • 0 Comments
Cash flow issues can stop a budding business in its tracks. Use these four tips to design a retainer fee agreement that not only keeps clients happy, but also keeps the lights on.