Financial Planning

Below are a list of some of the main pitfalls in financing a business:

• Underestimating the investment needed (the golden rule is to double your original estimate).
• Not including room to manoeuvre in your budget for the start up period.
• Forgetting your own personal financial requirement.
• Not putting aside money to pay taxes when they are due.
• Underestimating the difficulties of getting paid.
• Cash flow planning means looking at every item of income and expenditure and estimating when it will impact the business.

Summary

• A business plan is vital to the success of any new business – remember if you fail to plan you plan to fail.
• It is worth plenty time and effort.
• If you are starting up a business and have no previous figures to go on with the budget – be very thorough in your estimates.
• In your operating budget you should forecast, turnover, gross profit overheads and net profit.
• Include depreciation in your costs.
• Know how to calculate costs of sales.
• Dont underestimate your living expenses – be realistic, and include this figure in your budgets under drawings.
• Cash flow is just as important as profit, a profitable business can still fail due to lack of cash.
• Plan carefully so you can still meet all reasonable contingencies.
• Match how your outgoings coincide or otherwise with your income.

Contact us for more information

FDC Financial Services Ltd is regulated by The Central Bank of Ireland. Registered Office FDC House, Wellington Road, Cork. Registered in Ireland No: 069045