For your business plan you need to provide information that
talks about your business in terms of money. This includes how
much capital you need, if any. What security are you able to
offer to the people that may be lending you any money? And what
will your sources of revenue be?
Your financial forecast should include the following:
Cashflow forecast. This will be your balance of cash
and cashflow patterns for the first 18 months at least. This
is to make sure that the business will be able to survive the
first 18 months of trading.
Profit and Loss forecast. This will be the amount of
profit you expect to make, the amount you have projected for
your sales and cost of goods and your overheads.
Sales forecast. This will be the amount you expect to
generate in sales.
This information should run for at least the next 3 years, but
include most of the detail in the first 12 months. The investors
should be able to clearly see what the thinking has been behind
all the numbers.
A major concern to you may be how do you survive while you business
is getting started. The easiest answer to this is to make you
sure plan well. Be aware that you may not make any money in
the first year of trading, and cover your back to at least make
sure you can pay for all your outgoings (salaries, rent/mortgage,
overheads etc.). Make the provisions also for any unexpected
payments that may need to be made, for example, building works.
Seek the advice from a financial advisor of how you can help
yourself in the early days as well.
Making personal savings can help you. Small things like consolidating
your debts. This can involve you paying a 0% APR and a single
monthly payment is usually much cheaper than several. Re-mortgaging
your property could be another way to release some money that
would otherwise be tied up. Think about your own personal overheads
like your bills and see if you can contact the companies concerned
and make any additional savings. Set yourself a personal budget,
but ensure that you are realistic in the process.
Make sure that you do not waste money at home or in your new
business premises. Don’t use electricity unnecessarily and think
about your gas bills. All these little things will contribute
to you having more money in the long-run.
As it may be difficult initially, it is a good idea to try and
work out much money you made need to source within the first
12 months of trading.
You can do this by taking the following steps:
work out what your estimated income will be from your
work out what your expenses will be
estimate what you will pay for salaries, including the
and estimate what is left after your monetary requirements
and how much you will take out.
Once calculated, this figure will tell you how much you may
need to source from elsewhere. Be careful not to rely too much
on external funding on things like bank overdrafts as this money
can be spent very quickly and you reach your borrowing limits
before you know it.
In the initial stages of starting up, you will more than likely
always need money. Here are a few suggestions of places to look
for where this may be found:
Sell unwanted assets
Borrow from your family and friends
Release any unused equity
Get another job!
To avoid disappointment, make sure you plan well and take advice
from business tools that have dealt with business failures.
Commonly, make you sure you do adequate market research, plan
you finances well and thoroughly, always be aware of your competitors
and know what they are doing as far as possible, make sure you
have a high standard of customer service as customers are your
main driver for success in your salon and make sure that you
employee the right type of people with the right attitude.
All in all plan, plan, plan. If you fail to plan, you plan to
fail and so make sure that everything is above board and you
have a really good strategy in place. Apart from barriers to
entering the market that are outside of your control, there
is then no reason why you cannot succeed.