Financial projections | Numbers Knowhow

Know Your Numbers & Financial Ratios

Mahmood Reza — Fri, 02 Feb 2024 09:28:52 +0000

Numbers are everywhere, and for the most part, we just ignore them. That is unless we’re forced to pay attention to them when it comes time to do our monthly taxes or budget. But, for most people numbers don’t seem interesting. And this is something I’ve seen over and over again. Know your numbers I can’t emphasise enough how important it is to know your numbers. In your business, your numbers are your best friend. Once you realise that you will become less anxious about them. The enormous benefit your business numbers give you is clarity about how healthy your business is. They will help you in the good and not-so-good times. Because numbers don’t lie to you. They will always give you that reality check. They’ll wake you up from slumber and prompt you to take action. Financial ratios Your numbers can be turned into financial ratios. Consequently, they can tell you a lot about your business’s health and where it could be headed in the future. Here’s a quick guide to how to know your numbers and how to use the most essential financial ratios. Subsequently, you can start using your numbers to make smart decisions for […]

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What Is Turnover In Business?

Mahmood Reza — Sun, 06 Aug 2023 15:07:27 +0000

What is turnover in business? We’re here to answer that question for you. If you’ve been looking to get a grasp of what turnover is, then it certainly doesn’t help that there are different terms for it. As a result, you’re left wondering what they mean when they use all that jargon. By the end of this blog, we will clear all of that confusion. So, without further delay, here’s what this short blog (and vlog) covers: What is turnover in business (aka definition) To begin with, it is the standard term used by UK limited companies and when accounts are filed. HMRC use it in for the self-employed, large and small, and also for partnerships, large and small. Turnover also comes up for the Fifth Self Employed Grant. First thing is first. Let’s define it. What is turnover in business? It’s the amount of money received from sales for a given period of time. I know it doesn’t help that there are different terms for turnover – revenue, sales, and takings – but don’t worry, they all refer to the same thing. So, whenever you hear people talking about the company sales or revenue, they’re essentially talking about their […]

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Why Planning Is Good For Business

Mahmood Reza — Mon, 17 Apr 2023 08:05:10 +0000

Planning is an essential process for any business, regardless of its size or industry. It involves setting objectives, developing strategies, and laying out the actions needed to achieve them. Remember if you want your business to be successful, you need to get to grips with it. Don’t think “Oh no!” and glaze your eyes over. You really do need to plan, so read on. Why plan for business? Planning relieves anxiety. In other words, it relieves all that not knowing what’s gonna happen the next day. You’ve got anticipation about the way your business is going to move forward and you do need to move forward. Because if you don’t plan, your business will be going backwards. Stress relief, making money, having the business that you deserve and want… These are the reasons why you should be thinking about planning. It’s not boring, it’s essential. Above all, it shows how you can turn your business into a reality. Write your business plan or it may be hard for you to survive and prosper. So, if you want your business to make money then start putting one together. Planning enables clear direction It provides a clear direction and it helps […]

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Cashflow Forecast Guide

Mahmood Reza — Tue, 11 Apr 2023 10:46:34 +0000

Building your cashflow forecast might seem unnecessary to some – at a first glance, that is. That’s why, this cashflow forecast guide aims to explain why you need one and how to build it. Because, you might be thinking, “I don’t need one of those. I’m not going out of business!” But if you’re like most people, your business is constantly changing and growing. And when it does change or grow, that’s the perfect time for a new forecast! It doesn’t matter what kind of business you have – retail store, restaurant, consulting firm – forecasts are important because they help keep your finances in order and on track. Why you need a cashflow forecast This cashflow forecast guide undoubtedly needs to start with the reasons why a cashflow forecast is your greatest ally. Firstly, it will help you make sure that everything is running smoothly with your money. If something happens unexpectedly (like an unexpected expense), then at least you’ll know about it ahead of time so that you can plan accordingly. Forecasts also give businesses a chance to see where their money is coming from and where it’s going; this helps them figure out ways to make […]

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Cashflow Forecast DIY (with Microsoft Excel)

Mahmood Reza — Tue, 11 Apr 2023 10:38:06 +0000

A DIY cashflow forecast in Microsoft Excel. Sound interesting? Then read on: Perhaps not because you aren’t as comfortable dealing with numbers. But, this blog (and vlog) is here to show you that it isn’t scary at all. Especially when someone guides you every step of the way. So, if you want to learn how to create one such document containing your cashflow forecast, you’ve come to the right place. Let me start by saying that making your own cashflow forecast is easy with Microsoft Excel. You can use it for any business, big or small. And feel more at ease because you’ll be able to see where your business is heading. If you’re using Google Sheets or anything equivalent, then don’t worry! The principles, approaches and formulae will apply as equally with those other packages. I’ll show you how to build a budget from scratch by using the building block approach. We’ll also deal with sales taxes, loans and credit. What’s more, you’ll save time in the process! It’s a common problem for small businesses not to know how much money they’re going to make i.e. not have a cashflow forecast. This can be stressful, and it might […]

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How To Make Financial Projections

Mahmood Reza — Tue, 11 Apr 2023 08:41:08 +0000

Do you want to find out how to make financial projections and how to do it realistically? Here’s an easy-to-understand guide about making financial projections. A financial projection – meaning A financial projection is a forecast of the revenue and expenses that you expect for your business for a given period of time in the future. It usually contains predictions of several outcomes within. So, you can make a projection for your business in the case of sales or certain costs increasing/decreasing. In a sense, it gives you a plan B, and C… It doesn’t necessarily mean that it will pan out. Despite lacking accuracy, as it is a projection, it’s still a necessary part of business planning and development that you need to do each year. The reason being that it helps tremendously to set your business on the right path. And what it also does is it prepares you for the future. So, how do you actually make financial projections for your business? Let’s have a look. Part 1: Forecast sales What’s probably the most exciting part of it is projecting your sales. This is usually the first step in the process, too. Forecasting sales for existing […]

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