Start Your Business Week by Week, 2nd Edition

Back to your forecasts

Now put these figures back into your forecasts to see if your business works with this funding.

If you’ll be using asset finance, you can take out those assets from Capital Expenditure in your Cash Flow Forecast and the associated Depreciation from your Profit Forecast. Instead, just put a line for Asset Finance Charges in the Overheads section of your Profit Forecast and in the Expenditure section of your Cash Flow Forecast, and include the amounts quoted by the finance company.

If you’ll be using debt finance (loan, overdraft or soft loan), put two lines in your Profit Forecast under the Operating Profit line. The first line, should read ‘Interest Payments’ and the second should read ‘Profit before Tax’. On the first ...