Financial forecast

The financing plan is important because it shows whether you have access to the resources you need to finance all your requirements. Both totals must be the same amount

Needs are what the company will need to get up and running. Depending on the activity, these needs may vary, but they may include: a vehicle, production equipment, furniture and investments to be made, etc.

Resources are the means at your disposal to finance your needs. Resources can be provided by the company (personal contributions, investors, subsidies, etc.) or borrowed (microcredit, bank loans, etc.).

“For my restaurant, I need to think about listing all the equipment I need (hobs, utensils, fridges, etc.). If I’m applying for financing, I’ll need to provide an estimate if possible.”

The income statement is a table that shows whether you will make a profit or a loss. This table is made up of two columns: on one side, the company’s expenses, and on the other, the company’s revenues.

Expenses include all the company’s expenditure over the course of a month or year. It’s important not to forget any of them, as this will distort the company’s results. Expenses can be divided into 2 categories:

• 
  Fixed expenses
  These are expenses that you will have to pay every month, whatever happens, such as rent, salaries and social security contributions, accountants, loan repayments, purchases of goods and raw materials, and changes in inventory.
• 
  Variable expenses
  These are expenses that vary according to the sales you make. These are mainly purchases of goods. The more you sell, the more you have to buy.

Revenue consists mainly of sales, which are calculated by multiplying Quantity of products sold × Average selling price x Number of days open.

“For my restaurant, I calculate sales by estimating that I’ll have 30 customers a day spending an average of €20, and that my restaurant will be open 25 days a month.”

The largest fixed costs are wages, social security contributions and rent. To calculate variable costs, I use 1/3 of sales(see restaurant/bar data sheet).

Also known as Break-Even, the break-even point is the sales level at which a company covers its costs and therefore begins to make a profit. In other words, these are the sales you need to make to cover all your expenses.

Here’s the formula to calculate it: Break-even point (BEP) = Fixed costs / Margin on variable costs

In the Excel file you’ve downloaded, there’s a tab (Break-even point) which calculates automatically if you’ve filled in all the income statement data.

Contact us if you would like a microlux volunteer to help you calculate your break-even point!

“I need to make at least €13500 a month in sales to pay all my expenses. If I do more, my restaurant will start turning a profit.”

The cash flow plan is a table showing all your company’s cash receipts and disbursements. The cash flow plan is generally built up over the 12 months of the year, and each inflow and outflow is placed in the month in which it takes place. For example, a purchase made in March but not paid for until June will be entered in the “June” column.

Why is it important?

This table calculates whether you have enough money in your account to pay all your bills. Sometimes you have to advance money (to pay your suppliers, for example) and sometimes you have to wait to collect money from your customers, which can create “cash flow gaps”. This table is therefore very important, as many companies fail in their first year due to cash flow problems!

If you need help putting together your cash flow plan, contact us!

Please note: Expenditure and income are not linear throughout the year! Seasonal activities, for example, experience peaks and slumps in activity. The cash flow plan enables you to anticipate these variations as effectively as possible.

To create your own cash flow plan, use the Excel template you downloaded in step 1. Financing plan!