finance forecasting Archives | Numbers Knowhow

Have A Successful Business

Mahmood Reza — Fri, 26 Jan 2024 11:03:32 +0000

What does having a successful business mean to you? That is a really important question to ask yourself when starting out. This quote below sums it up rather nicely. “If you don’t know where you are going, you’ll end up somewhere else.” – Yogi Berra And really, if you don’t know where you want to go, it is much more likely that your course will have many twists and turns. Not to mention, that it will be a bumpy ride. On top of that, it will be difficult to figure out how to reach success. As we know, you’ve got to start with your ‘why’ and you’ve got to set smart goals. But more on that later. It’s important to stress that business growth doesn’t just happen organically – it takes time, effort, and commitment. In other words, it always starts with a plan. Certainly, most people want to make a mark and have an impact with their business. And whatever your company’s remit, be it private gain or public benefit, to have a meaningful effect on your clients and yourself, it needs to make money. Only with money can it grow and scale and have the impact you […]

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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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Final Steps Of A Business Plan

Mahmood Reza — Fri, 01 Dec 2023 11:51:10 +0000

Each business plan needs to be meticulously constructed in order to be effectively used in the future. This blog will discuss the final steps of a business plan and give you an overall idea of what needs to be done. The three groups that encompass these final steps are the following: Management Financial forecast Presentation Final steps of a business plan: management One of the final steps of a business plan is defining the management roles within your team. You can achieve this by outlining the strengths and weaknesses of each team member as well as describing their background and experience. Consequently, you will have a clear overview of who in your team is suitable for a certain role, and make the allocation accordingly. Furthermore, you need to clarify how you intend to cover the key areas in your business, such as production, sales, marketing, finance, and administration. Lastly, you need to maintain your management information systems in good condition. This includes the management accounts, sales, stock control, and quality control. How committed are you? Businesses often further develop and prosper thanks to partnerships and investors. So, if your goal is to attract banks or potential investors, as a […]

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Gross Profit & Net Profit: What Is The Difference?

Mahmood Reza — Fri, 19 May 2023 09:33:22 +0000

Making as many sales as possible is the goal of every business. Whichever service you offer to your customers, that is going to be what you’re aiming for. However, what really lies behind a successful business story is the profit generated from these sales. In this week’s blog, we will go one step further and look at two types of profit you would typically encounter, gross profit and net profit. What exactly does gross and net profit mean? What’s that all about? Gross profit Gross profit in business terms is the profit made once you deduce the costs the business has incurred for manufacturing the goods and/or providing the services. An easy way to grasp the meaning of it is through examples. For example, Maggie sells homemade biscuits outside her house at 50 pence a biscuit. Now, if she sells a hundred of those, then she ends up with £50. Those £50 are her sales, but it’s not her profit. Maggie needs to spend £10 first for flour, eggs, and sugar. She reckons this will be enough to make a hundred biscuits all in all. This means that she gets a £40 profit. Those £40 are her gross profit. Here […]

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Business Numbers – Friend Or Foe?

Mahmood Reza — Fri, 19 May 2023 09:15:33 +0000

Do you see your business numbers as a friend or foe? If you are in business, what is your attitude towards your numbers? Do you like them, dislike them, or is it somewhere in between? That is what we are going to cover in this blog. If you think that money is an icky subject, your business will remain a hobby instead of further developing and improving. Many business owners are good at what they do. They may have great skill and craftsmanship, they may excel in providing service to the customers, but they are not necessarily aware of the financial impact that affects their business. Numbers are your best friend Have you ever thought about who your best friend in business is? Spoiler alert, it is your business numbers. They are your best friend meaning they will not lie to you, nor let you down. Your numbers help you navigate your business through turbulent times as well as in times of prosperity. Sometimes, a poke in the eye may seem better than dealing with your business numbers. For some people, the flashbacks of Maths classes with Mr Calculate and Miss Take Away are far from being pleasant. Consequently, […]

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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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How To Manage Your Business Risk

Mahmood Reza — Tue, 11 Apr 2023 09:34:19 +0000

Managing your business risk is something you need to know no matter what kind of business you run. Naturally, there will always be some inherent risk involved when running your business. There’s no way to completely eliminate the risk. But by understanding and managing it, you can minimise its impact on your bottom line. In this blog, I look at the following: Understanding what risk is, Looking at risk categories, How you can identify risk, Ways to manage your risk. Watch the video to find out more about managing your business risk, or simply read on. What is business risk? A business risk is any situation that is sure to make a company not reach its goals. For example, it may be something that will have an effect on the relationship or communication with your customers. Consequently, you’d lose sales, and make the desired profit. Another example could be some sort of natural disaster. This may also affect communication with clients, or distribution of products (if you’re a product-based business). It could also be loss of suppliers. This will then result in you not being able to deliver on time, or deliver as big a quantity as you had […]

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Why Financial Planning Is Healthy

Mahmood Reza — Sun, 16 Oct 2022 16:09:24 +0000

Financial planning is one of the key components should you want to have a chance in the race to the top. All business owners simply must sit down to do it, either on their own or with the help of a professional. You should devote time to it because of all the financial planning benefits, some of which we will cover in this blog. If you’re not sure what a financial plan is, then do check out this informative video. If you, on the other hand, are familiar with what it means, but you still haven’t done it, then here’s a bit of persuasion for you. Why is financial planning healthy? Reason Number 1: It takes some of the stress out. When you have your financial plan in place, you can feel more relaxed with regard to potential emergencies you might face. We can never predict them, but we should always try to be prepared for them – the best way we can. If it so happens that you become ill, or business runs a bit slow at a given period, you will be reassured that it’s not all going to crumble. Having that sense of financial security will […]

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Budgeting & Forecasting Software For Small Businesses

Mahmood Reza — Thu, 07 Jul 2022 21:32:50 +0000

A good budget planner for small business is a must for businesses that want to stay ahead of the competitive curve by keeping on top of their finances . Whether it’s financial management or expense tracking, for example, the right budgeting and forecasting software can help you dial in your finances – more efficiently and cost-effectively than any other method. What is Budgeting and Forecasting Software for Small Businesses? Budgeting tools for small business, financial planning software for small business, online budget planner, etc. Whatever you call them, they all help you consolidate all your long-term activities around financial planning. Moreover you can track and review your financial progress in real-time. The ‘budgeting’ and ‘forecasting’ elements in budgeting and forecasting software works collaboratively to automate your company’s financial planning. For example, on the budget side of things, the software can help you create and manage highly detailed yet easy-to-understand Financial Story Plans. On the forecasting side of things, it provides an approximation of your company’s revenue vs. expenses based on historical data and future market condition estimates. The right forecasting and budgeting tools for small business allow you to spend less time on cumbersome and often tedious tasks around […]

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All You Need to Know About Finance Forecasting

Mahmood Reza — Wed, 01 Jun 2022 21:07:32 +0000

A lack of forwarding thinking, having no Finance Forecasting is a problem for businesses. It’s much like turning off the light and trying to find your way around an unfamiliar place in the dark. There is very little in the way of direction. While financial forecasting is not set in stone, it can certainly help. After all, looking ahead can prepare you in many ways. When you run a business, it’s a constant battle. One where you have to overcome challenges and ensure your business is ready. This is where finance forecasting can make a difference. What does Finance Forecasting Mean? A finance forecast will provide you with insight into how your business will look in the future. An example of this is a prediction of how much revenue your business will generate. This kind of information makes it easier for you to make informed decisions and that’s key as a business owner. Additionally, you can use finance forecasting to predict other revenue. This can include fixed costs, capital and variable costs. Furthermore, you can use historical performance data to identify any possible trends. As a result, it will empower you to allocate resources after predicting what might happen […]

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