We all have seen the news articles pop up on our news feeds and screens: the housing market is HOT. Interest rates are low. Plus, being stuck inside for the better part of a year or more is enough to make anyone realize you could really use more space. So, you decided to enter the housing market to sell your home. Now the question is: are you going to sell traditionally, or sell your home online? With the rise of national websites offering to pay cash for your home, promising no showings and fast closings, it can be tempting to sell your home online to these companies.
But what would you lose by doing so? There are several types of home loans specifically for teachers, because we all know they deserve a chance at homeownership with the tough job they have. But did you know that there is a specific government-backed loan for teachers looking to buy a home in rural areas? A USDA home loan for teachers requires zero down payment, is designed for lower credit scores, first time home buyers, and can be used across most of the United States?
Between grants, national funding, and different types of loans, there is a home buying program out there for everyone. Educators have have an immensely important job within our communities. So, when it comes to buying a house, getting a home loan as an educator should be easy.
Thankfully, there are a number of great home loan options available specifically for educators, as well as down payment assistance. Trying to buy a home as an educator can seem challenging. Luckily, there are several educator mortgage programs to save you money on your down payment and closing costs. If you use our free template see the link above , this will be automatically calculated for you. Expenses — money going out This section is where you list any of the expenses your business incurs, like your premises rental, staff wages, council tax, supplier costs, marketing and promotional expenses etc.
Again, the number of items you include will depend on your business model, but a typical expenditure section can be anywhere from 10 to 20 line items. Net cash flow — the balance This final section is the difference between your total revenue A and your total expenses B. If this figure is negative, it means that you are anticipating your expenses will be greater than your revenue in that period; conversely, if the figure is positive, it means you are anticipating your revenue to be greater than your expenses and to deliver a profit.
If you use our free template, your net cash flow for each month and for the year as a whole will be automatically calculated for you. These tips have been prepared by our Business Advisers and loan assessment team to help you understand some of the key things that will strengthen your application:.
Make sure you understand the difference between revenue and expenditure. Remember that some of your costs will be recurring costs and others will be ad hoc. Depending on your fixed and variable costs, this may create more or less pressure on your cost base during this period. If you expect one of your promotional campaigns to deliver a high volume of new sales during a key month, you should try and reflect this in your numbers. Essential cookies. These are cookies that are absolutely necessary for the website to function properly.
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We will use this information to make our advertising and marketing campaigns more relevant to your interests. We may also share this information with third parties for this purpose. Functional cookies. These are used to recognise you when you return to our Website. This enables us to personalise our content for you and remember your preferences for example, your choice of language or region. Cash Flow Forecast template A Cash Flow Forecast is a tool for recording how much money you are likely to have coming in and out of your business at any point.
Cash Flow Forecast template Free instant download. What is a Cash Flow Forecast? This file includes a separate tab with guidance on how to use the template, as well as some useful hover-over tips and messages on the template itself to support you as you work through. For your ease, this file includes a blank Personal Survival Budget template, which you must also submit with your application.
These two templates are automatically linked together to reflect where any shortfall in your personal budgeting may need to be made up by drawings from your business. The file also includes a Business Plan template, which is required for your application. Why is a Cash Flow Forecast important? A Cash Flow Forecast tool: Is great for planning your business activities and resources Ensures your business activities are correctly aligned with each other Supports you in making sensible, realistic decisions for your business Gives you greater control over your business finances Allows you to better understand your business performance Helps you plan for the future How do I complete my Cash Flow Forecast?
A Cash Flow Forecast is made up of three key sections: 1. You add all of these sources together to figure out your total income A. You add all of these sources together to figure out your total expenses B. Revenue, or income, is any money your business generates. In a product-based business, this is likely to be made up of the sales of different products.
That would be fine as a start — but breaking this down into individual sources of income will provide you with more a more grounded, well-researched and adaptable forecast. But beware — you can go too far in the opposite direction here! This would take up a huge chunk of time and quickly become unmanageable. This is a good balance between detail and practicality, and still provides granular insight into what you are selling.
Now, existing businesses would find this easy, because they would simply look at their sales form the same period last year. You can do a lot of research into what similar businesses sold in their first year, what businesses in your local area sold in their first year and how much you think you could sell over your chosen period. The most important piece of advice we could give you when forecasting your income is to be realistic.
So, remember that these figures should be what you think you can actually sell, not your target of what you would like to sell. A simple way to get started with estimating sales is to use the following technique:. But, some days are different from others. Weekends see higher footfall in our shopping centre, while midweek is a dead time.
Make your income assumption as realistic as possible by considering these possibilities. Check out our full guide for creating a financial forecast with no historical data for more information. So, to help, we have put together an example scenario for you of a relatively new startup sole trader working in a simple business, and what his sales forecast might look like:.
He works closely with an author, Erika, whose books he illustrates. Erika plans to write a new book early next year so Kevin expects to illustrate that. He also expects to win a contract to draw an online comic strip series. He carries out ad-hoc work illustrating greetings cards and would like to expand that side of his business.
This work was particularly lucrative in the run-up to Christmas. Kevin plans his sales for next year. He puts each of the three sales channels on one row of his spreadsheet. Then, he records the sales when he expects to earn the money, not when he expects to be paid for his work — this is important because he will make his cash flow forecast later, and sales will form part of his profit and loss forecast, which needs to be drawn up on the basis of when he earns his money and when he incurs his costs.
Also, Kevin is registered for VAT, so he records his sales net of this. He records his sales in round numbers, because this is a forecast rather than an exact prediction. He can either plan how many units of product he expects to sell i. Once you have your base figures from this exercise, you can start factoring in anything that might affect your sales both positively and negatively.
For example, you will need to account for any seasonal spikes that could lead to an increase or decrease in traffic. If you sell ice cream, you are likely to see a lull as the weather gets colder. As a new startup, you will undoubtedly have a period of time at the beginning where nothing much happens.
This is while you are networking and promoting your business, letting the world know you exist. The length of this period will differ hugely depending on the type of business you are and your location. For example, a new high street shop may have a fairly short sales ramp-up period due to their public location, whereas a new accounting firm might have a longer ramp-up period as they make people aware they are there.
This is the part that makes most startups cringe. A cash flow forecast helps you to understand exactly what it is you need to spend, and when, so that you can plan your investments to match your income and avoid dipping into the red. The process for this is basically the same as with your sales forecast , but instead of filling in what you expect to sell, fill in what you expect to spend.
No payment is too small to be missed off this list, and you should try and make sure you are fairly accurate with when the payments would be made, as this will be important later. These costs can then all be sorted into their respective groups. There may be 8 or 9 expenses that are all directly related to your sales cost of sales , while 4 are one-off equipment purchases and 3 are your annual insurance payments.
Related: How understanding the marketing funnel will boost your sales. Cost of sale expenditure is directly attributable to the production, delivery and sale of the goods or services sold by your business. This is usually most relevant to businesses selling products. Your cost of sale should include the physical cost of the materials used in creating the product, along with the direct labour costs involved in making it.
You should split out costs of sale from operational costs in your cash flow forecast because they are so closely related to the sales you make. You might decide to buy or make a product a month before you get income from selling it, which will affect your cash flow.
You might bulk buy products to last you several months, or you might choose to only order stock when a buyer comes in. Using this number, you will be able to work out not only how much each sale is costing you, but how much profit you are making on each one as well. Next, we take a look at operational costs. There are often easier for startups to put together because these are fixed outgoings.
So, you will have fixed costs for things like:. And all sorts of other day-to-day running costs for your business. These are or should be known quantities, with no guesswork involved at all, so this section should be nice and quick! For example — do you pay all your bills monthly, or do you get hit with a big annual bill? Is there one month where the costs all seem to pile up, and you need to make sure you have enough in the bank to cover everything?
Pulling apart when your ongoing costs occur can help you see the bigger picture of your businesses financials before you even start trading. These are items you will physically own, usually for a long period of time. But to give you an idea, here is an example that most people will recognise; the purchase of a car. You have an initial cost this hits your cash flow quite hard but then it also has value after the purchase. So, unlike a cost such as rent, the value goes on your balance sheet, which, in the case of a car, immediately starts reducing over time due to depreciation.
Finally, a few years down the line you might decide to sell it or write it off. The sale is at the depreciated value, and the income from this sale appears on your cash flow. The types of assets you are likely to purchase depend on the type of business you are running and can vary hugely.
For example, an office-based business will need to buy office furniture and computers, whereas a retail store will need shelving units, storage areas and tills. A tradesman will need a van and high-quality tools, while a coffee shop will need coffee machines, grinders and other specialist equipment. All of these things will need to be bought at a certain time and need to be planned for in advance so that your cash flow stays positive.
Funding is an interesting one because different accountants will tell you to put it in different places. Personally, I like to consider it as a separate line item, so that I can be clear about where money is coming from or going to, and when. This is particularly important when you take out business loans. The initial loan will inject some cash into your business, which needs to be accounted for in the cash flow.
You then need to be aware of any repayments and interest on the loan, as this will also impact your cash flow. If you are VAT registered, you need to bear in mind when your bill will arrive and plan for it, as it can dramatically affect your profitability.
But it does pass through your business — so it does affect your cash flow. But at some point, in the year, you will get a VAT bill, and that money will need to go back out. Something that trips up a lot of startups is forgetting to set aside the VAT or even account for it, so when the VAT bill is due they end up scrambling for cash to pay it. This is a tax on your net profit. This may not be relevant for you as a newly launched business initially.
Once you are profitable, it is important to take this into account on your cash flow forecast since it can be quite a big payment. But there are some techniques that many seasonal businesses will employ to manage their cash flow through these tougher times:. On top of these options, seasonal businesses also need to spend a lot of time nurturing their cash flow.
These businesses often develop monthly sales spending and cash flow forecasts. Cash flow will become the managing driver behind spending, and changes will be carefully monitored. We regularly write guides and articles about every aspect of planning and running a business, while our support area includes more detailed information on building plans in Brixx.
Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Open the sample statement of cash flow below and step through it from top to bottom. This example will serve as a template for your own cash flow statement. The starting point for cash flow is the Net Ordinary Income from the income statement. This adjustment can seem counterintuitive at first. It is easiest to understand using the example of the first month of the new business.
Since the amounts were invoiced on terms of net 30, no cash has yet been received. The cash flow statement has to show the change in accounts receivable from one month to the next. Assumptions such as this are reasonable taken as an average and can be used to forecast this line item of your cash flow statement. Just as we made an entry above for changes in accounts receivable, we would have a similar entry for the change in accounts payable. If our accounts payable bills owed but not paid increase, we would have to subtract the amount of change to reconcile cash to net operating income.
Most new, small businesses are required to pay their bills in the current month. All bills are paid at the end of the month. With no change from month to month, no cash flow adjustment is necessary. Deposits and Prepaid Expenses.
Yet it takes away from cash in the bank. Capital Purchases. For an understanding of how capital purchases and depreciation work together, read the capital purchases section and the depreciation section together see below. When you purchase a piece of equipment, the impact on cash is immediate.
However, the full expense only shows up on the income statement over a longer period of time. So once again, we have to make an adjustment to reconcile net operating income to cash. This is a two-part exercise. To account for the purchase price of the asset, we make an entry for the full cost on the statement of cash flow in the Capital Purchases line.
These are shown as negative numbers because they take away from cash. When you purchase an asset such as a piece of equipment with a useful life greater than the current year, the government requires the asset to be written off over a longer period of time. Why does the government care? The rules governing depreciation are complex and vary by the type of asset.
On the income statement, this keeps the expense even instead of creating a big hit in a single month. On the cash flow statement, we have to add back depreciation to reconcile cash to net operating income. Net Cash from Operations. The sum of the net operating income and the adjustments to reconcile to cash detailed above equal the net cash from operations.
This is a subtotal on our way to showing the month-ending cash balance. Financing Activities. Each time you receive money for a loan or capital investment whether by an owner or investor the proceeds need to show up on your statement of cash flow. While interest on a loan is an expense and therefore found on the income statement, principal repayment is not categorized as an expense.