Understand business finance

Firstly, you should figure out how much money you’ll need to set up your business. The benefit of calculating this figure is that you’ll be able to compare it to the amount of start-up capital you’ve got saved, and see how much money (if any) you’ll need to borrow to get up and running.

Your set up costs will include things like equipment and fit-out, any registrations and licences, accounting fees and an amount for working capital to cover day-today operations.

To save yourself any potential headaches, it can help to have an idea of how much you plan to make and lose over the next 12 months.

Profit and Loss

Map out your predicted sales and expenses for the next year. While this may prove difficult initially, as you’re dealing with potential sales not yet made, work with what you know, such as fixed costs like goods and services you’ll need and your fixed costs of doing business. This will give you an idea of your likely margins.

Cash-flow

Cash is the lifeblood of any new business, so having an idea of your predicted cash-flow is vital. Keep in mind that customers and vendors may be slow to settle up with you at times, so allow for a bit of flexibility in this forecast.