CASH FLOW ANALYSIS

THE BUSINESS PLAN

• Cover page, list of contents, and summary page;
• Business description - products/services, history & plans;
• Marketing - your industry, competitors, target market & marketing strategies;
• Operations - where & how will you operate, suppliers, staffing;
• Finance - history, forecasts, assumptions, break-even analysis;
• Appendices - further details of above, examples, etc;

PREPARING A CASHFLOW FORECAST

1. Forecast monthly sales - the most important step
2. Identify cash receipts - cash sales, plus credit sales over time. Also one-off cash receipts such as owner's cash introduced, bank loans, asset sales (e.g. boat) etc.
3. Identify cash payments - fixed costs do not change with levels of sales, but variable costs (e.g. purchases of goods for sale) will depend on sales levels. One-off cash payments will include the original equipment and stock purchases. Do not forget owner's drawings for living expenses, and to pay tax bills, etc.
4. Total the monthly columns to forecast the monthly closing bank balance.

THE LOAN APPLICATION

The TDR Small Business Blueprint suggests the following contents for a loan application (ask your bank what they suggest you include):

Statement of personal assets and liabilities with recent asset valuations;
Résumé of the applicants;
Business plan, including:
products & services, competition & market position, location, business structure, customers & suppliers, industry outlook, profit history, staff and management, profit & loss account and balance sheet for 3 years, cashflow projection, basis of sales projections;
Amount & purpose of the loan, security offered, repayment terms desired; Trade/business references, key adviser details;