How to Succeed in Business

Success in business depends on more than profits. It also depends on planning positive liquidity and cash flow which is ultimately what success depends on.

Starting and Staying Successful

The two golden rules for success in business begins with profitably offering goods or servces that people will want to buy at prices thay are prepared to pay. Staying successful calls for never running out of cash.

Positive cash flow is non-negotiable: The overwhelming majority of companies that go into administration or liquidation (which is usually the how it ends) do so while still showing retained profits in the balance sheet

Forecasting and Planning Objectives

Every business needs to plan ahead, not just for profits but for liquidity and cash flow. That will call for accurate forecasting, especially for when it comes to having enough cash on hand to pay the bills on time.

Profits are essential but they do not guarantee solvency. How well the company's cash is managed is what matters most of all. Excessive investment in illiquid fixed assets, goods for resale on the shelf or accounts receivable that are taking longer than they should to pay up all need to be avoided.

What your forecasts will be telling you therefore is not only what your targets for sales, margins, overheads and investment need to be but what your overall policy ought to be concerning investment, cash collection and most crucially, financing.

Forecasting Working Capital and Liquidity

Cash flow comes from a company's liquidity. It represents a surplus of cash plus cash convertible assets such as accounts receivable and stock less current liabilities i.e. debts payable within twelve months. 

Described as net current assets they are also known as working capital. This appears in the balance sheet forecast, one of many Figirewizard produces just from your own projected figures.

This is the crucial measure of a company's ability to pay its way. If your balance sheet forecast is showing a deficit by the end of the financial year, obtaing finance to cover the occassional month's shortfall will become very difficult.

Forecasting Profits and Cash Flow

Figurewizard forecasts are produced in a simple and straightforward yet comprehensive fashion. All that is needed from you are your forecast sales, margins, overheads, asset purchases and sales and simple cash ratios for one, two or three years.

From this our system produces all of the forecasts for profits, cash flows, balance sheets, analysis of overheads, assets and liabilities, VAT transactions and corporation tax –  essential elements for successful planning.

All entries with the sole exception of company cars are entered exclusive of VAT as, like everything else this is automatically calculated.

Assessing Figurewizard

Interactive working examples of the forecasts can be viewed by going to "sample forecasts" or by following "useful links" below. Changes can be made either by selecting "edit this forecast" or better still by using our unique What-If planner.

How Much Does Figurewizard Cost?

The annual subscription of UK £20 (approx. US$32 or €25) enables you to save up to a hundred full sets of forecasts.

All saved forecasts can be retrieved for updating and exported to excel for formatting and printing.

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