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Get Your Numbers Right

It is often said that what you don’t measure, you cannot manage / improve. It cannot be more explicit than that especially when you are about starting a company.

Whatever the size of the company you are planning, it is important that you have financial projections so that you can have an idea of the total cost needed to get the business off the ground and also the average monthly cost needed to run a business.

Several times, all these are not put in place and the result is that a business is dead on arrival since the cost is more than envisaged by the business owner.

In starting a business, the following costs need to be put in perspective:

Fixed Assets Cost. These are the cost of land, equipment, furniture, vehicles, renovations on building to suit the business etc.

Operating Capital. These are salaries, licences (if any), legal and accounting processes, cost of advertising, utility, supplies and inventory (if it is a product company) bank loans (if any) and cash in hand.

Source of funding.  It is important that you list your source of funding if it is solely yours or you got other partners to have equity in the business.

Most times, it is safer to plan your recurrent expenditure for 12 months without getting sales or service. This helps to cushion the effect of not selling in 12 months or not getting a clientele. (though i wonder why you will start a business that you will not make a sale in 12 months).

If you are planning an online business, then you need to know that the cost of office (that is not in use primarily because it is an online business) is added to the cost of advertisement or social media marketing.

s4-financial-projections is an excel spreadsheet that can help you achieve financial projections for your startup business.

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