Business Planning

So, you want to set up a business. A key question is how much cash you expect to lose or generate in the first critical couple of years. What is the minimum amount of business you need to carry out to keep your head above water?

If you are a sole trader, an important constraint is how many hours you can or want to work. Do you rent premises or not? This affects not only your operating costs but doubles your autonomo payments. Should you offer introductory discounts? If so, how much and for how long?

How do you set prices and what value do you put on your hourly rate? Does the sum of materials plus labour costs add up to a sensible price which a customer is willing to pay?

We’re in the middle of developing a cash flow model for a client which addresses all these issues. Business is much more than just sales!

February 5, 2015

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