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Business founders/entrepreneurs

New start up Projected Cash Flow/forecast

2 replies

BeMintBee · 05/12/2024 12:54

A local authority require this before I can be a registered service provider. they know I’m too new to provide any accounts but actually have no idea how to calculate projected cash flow. Everything is still in its infancy with enquiries and securing work coming in?

Where to start? any help gratefully received!

OP posts:
DogInATent · 12/12/2024 22:31

A cashflow forecast is how much you expect to come in, how much you expect to go out, and when you expect this to happen. You might do it by week or by month. It's useful because you might need to pay for things upfront before you get paid by your customers.

Month, Description, Cash, Running balance
January, Rent, -£50, -£50
February, Rent, -£50, -£100
February, Income, +£20, -£80
March, Rent, -£50, -£130
March, Electric, -£70, -£200
March, Income, +£120, -£80
April, Rent, -£50, -£120
April, Income, +£250, +£130

It will be more complicated than that. But as long as the values are realistic and you don't forget anything, it demonstrates viability. And in the very simple case above, tells you that you'd need at least a couple of hundred quid in the bank at the start.

lyrapie · 12/12/2024 22:34

This might help

www.caplus.org.uk/cash-flow

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