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5. Decide how much money will be needed to start the social enterpriseHow much money you will need to start your business will depend on the type of business you are starting, where you are locating, how many staff (if any) you need to employ, the equipment or machinery you need, the costs of building alterations to the premises, the cost of associated licence fees if needed, and so it goes on. The amount needed to effectively start a business, differs from business to business, area to area, organisation to organisation. You also need to consider the amount of working capital that you will need. Working capital is needed by every business to encourage sales through credit and, for those in retail, the purchase of goods for stock. (Hover over the buttons for an explanation of each figure and click to reveal the projections these figures create)
Cash Flow Forecast A Cash flow Forecast is a forecast of money going into and out of the business over a specific period of time. This financial planning exercise is very beneficial when considering starting up a new enterprise because it:
The essence of cash flow forecasting for a business is simple: the total income received in a month minus the total costs incurred in that month produces the Net Cash Flow for that month – this can be positive i.e. overall money is going into the business bank account, or negative – the closing balance at the end of the month in the business bank account will be less than the opening balance at the start of the month. Downloadable Support Materials
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