Funding and Finance

If you are seeking funding from a bank or other agency, they will expect to see your projected business turnover supported by calculations based on sales forecasts. 

Sales Forecasts - To succeed in business, you need a sales plan which describes and quantifies over a period of time how sales of your products and services will be made and to whom. The plan must include information about your business and customers. See www.gov.uk/forecast-business-finances for further support and templates.

A sales forecast predicts how many units of a product or service will be sold over time, such as on a monthly basis. This can then be multiplied by the price of each unit to give you a prediction of how much money you might take in from customers each month. The total amount of money gained from customers is known as the business 'turnover'. Some businesses are quite seasonal, be this on location or by product range, so consider if your turnover is likely to fluctuate with the time of year. It is hard to forecast the future with pinpoint accuracy, especially before you have started. It may be helpful to do more than one forcast, one with sales going as well as they reasonably could be predicted to go, and another that assumes sales are going as slowly as you feel they could go in the worse case scenario. Reality is likely to fall somewhere in the middle of these two extremes.

Before going any further you will need to consider a breakeven analysis. The breakeven point of a business is the level of output or sales at which the income received by the business is exactly the same or equal to the cost of making and selling your product. The most important objective for any business is, at the very least, a breakeven point, although making a profit would of course be even better. The process of calculation is the same no matter what the product or service is. 

Costs Cash-Flow Sources of Funding

More information coming soon