cash flow planning for startups cash flow for small business cash flow for small business Archives | Numbers Knowhow

Sales vs Profit: Know The Difference

Mahmood Reza — Mon, 04 Dec 2023 11:11:53 +0000

Any business that strives towards success should be making money, or in business terminology, generating profit. One of the main reasons that businesses go under is because of the confusion between two seemingly similar, but in reality quite different aspects. It’s about the famous duo: sales vs profit. What do we mean by cash? How about profit? How are they related to each other? Which one of the two is more important for business growth? I will cover these points in this blog and bring you closer to understanding what really keeps your business going forward. So, let’s start bit by bit. Sales vs Profit: What is the difference? Whatever your business type is, there are products and/or services that you are offering to the end customers. Hopefully, they will recognise your worth and buy from you, not just now, but in the future as well. Now, whenever someone buys your product, you are generating sales. You are piling up the cash you receive from your customers. However, and here is the tricky part, the amount of sales is not actually your end profit. We now come to the sales vs profit part. So, yes, you have received the […]

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Manage Cashflow: Five Top Tips

Mahmood Reza — Mon, 21 Aug 2023 09:04:28 +0000

Wondering how to manage your cashflow? You’ve come to the right place. By the end of this blog, you’ll have read about top tips to manage your cashflow and you will be equipped with the necessary information to help you do a really good job at it. Cash and business But firstly, what is cash? It’s what gets paid into your bank account. It’s factual, and more importantly, is the lifeblood of your business. Secondly, why do we need cash? Your business needs it for a whole bunch of things. Typically, cash is needed for: So running out of cash, access to cash or poor cash flow is squeaky bum time. Your business will survive if your cash flow supports it. However, if you do a bad job at managing your cashflow, the cash will run out, or access to it will dry up. Unfortunately, it is the end of the business road if you reach that point. It’s not for nothing that the phrase “Revenue is vanity, profit is sanity, and cash is reality”, rings true. It’s good business practice to have a good cash flow management strategy. Here are the five key elements that you should include […]

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Financial Statements Explained

Mahmood Reza — Sat, 22 Jul 2023 10:26:39 +0000

Financial statements explained is the topic of this blog (and vlog). And it will serve as a guide to you so that you can better understand them. Why do you need to know about financial statements? Because the financial statements form the bedrock of any company. Therefore, understanding them and how they work gives you insight and clarity. In this video, I’ll walk you through: What each statement is, The content of those statements, Why it’s important to understand these documents. Financial statements explained There are 3 types of financial statements, and they are: 1. The cash statement It summarises where the cash in your business comes from, and where it goes. 2. The profit statement Also called the P&L, or profit/loss statement. It shows you your company’s profit and loss over a given period of time. 3. The balance sheet It’s a financial statement of the assets and liabilities of a business at one particular point in time. Benefits Undoubtedly, these documents give you, as a business owner, the numbers of the company and show you: how your business is performing financially, and where you stand in terms of your cash flow. Certainly, this can be overwhelming for […]

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Business Objectives & Goals

Mahmood Reza — Mon, 17 Apr 2023 08:06:23 +0000

Business objectives are the specific goals that a company sets for itself in order to achieve success. Your business plan is nothing without your business objectives and goals. They are the driving force behind a company’s decision-making process, and they help to ensure that everyone is working towards the same end goal. Firstly, as a general rule, it’s good to have objectives and goals in your life. Secondly, it’s crucial to have them for your business. They will help it run smoothly and ensure a focus to continually improve on. Moreover, they will help define what and where you want your business to go. “If you do not know where you are going, every road will get you nowhere.” – Henry A. Kissinger In this blog, we will discuss the importance of business objectives and how they can be used to drive a company’s success. The importance of business objectives Business objectives provide a framework for decision-making within a company. In other words, they help to ensure that everyone is working towards the same goal, and they provide a sense of direction for the entire organisation. Without clear business objectives, a company can easily become derailed by competing priorities […]

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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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Why Cash Is Important For Business

Mahmood Reza — Tue, 07 Feb 2023 11:29:50 +0000

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Cash Flow & Financial Planning

Mahmood Reza — Sun, 10 Jul 2022 21:33:30 +0000

There are many facets of cash flow and financial planning. For instance, cash flow for small business may be very different from personal financial planning versus financial planning for retirement or financial planning for family. Writing and using your Financial Story Plan Let’s start with cash flow planning for startups and financial planning for small business. While some of the basic principles of cash flow and financial planning apply, small business owners, for instance, must take a few extra considerations into account. There are many benefits of financial planning for small business owners, particularly when they make use of financial planning tools or professional financial planning software for small business. Something as simple as writing your Financial Story Plan helps you figure out: Both your business and personal goals; The areas which can improve or be invested in; A strategy to achieve your broader vision; Monitor that strategy to ensure you’re on track and make adjustments to suit changing business or personal goals – some of the best financial planning tools have helped business owners plan out their business and personal finances in a relatively stress-free and efficient manner. Personal Financial Planning and Cash Flow Planning Personal financial planning, […]

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Cash Flow Forecast Templates Add Value

maishedu — Tue, 31 May 2022 11:39:44 +0000

We have all heard of the saying that cash is king and when it comes to business, it really is. What about the saying “if you fail to prepare, prepare to fail”? This is also true when it comes to business. It’s common to worry about your finances as a business owner. You might have figures going around and around in your head. What is a concern is that many business owners choose not to take control of their future, so why do the same? When you take this approach, failure lurks on the horizon, waiting to make you pay for your lack of forward-thinking. Don’t let this happen. In fact, you don’t have to let this happen because you can use a template for cash flow forecasting. What is a Template for Cash Flow Forecast? Essentially, this will enable you to see how much money comes into your business and how much goes out. That’s what it is in its simplest form. This might leave you wondering where you need to begin but it’s not that difficult. Through the use of cash flow templates, you can add more value than you realise. This is because you can project […]

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