When doing financial planning for the first few months of my new...

When doing financial planning for the first few months of my new business, what sort of things should I bear in mind?

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The first step is to determine possible turnover

This should be done conservatively. Once this is determined, required resources and related costs should be taken into consideration. There are two groups of cost; fixed cost and variable cost, especially cost of sale.

Entrepreneurs often forget about fixed cost and set price according to cost of sale plus profit.

When fixed cost such as salaries and rent are then paid, a loss is made. Fixed cost should be distributed across the estimated amount of sales and added to the price. If this cannot be done without pushing the price too high for the market, there is no business to be had.

Dr Frances Wright
Dr Frances Wright is responsible for the overall management of Trinitas Consulting (Pty) Ltd. Frances has a BSc Honours in Industrial Technology, a diploma in operations management & a certificate in production management. Frances completed her MBA at NorthWest University in 2007, where she was honoured as the top Operations student. She was awarded her PhD in Entrepreneurship at North West University and acts as a business mentor and trainer for Business Partners and Enablis. Frances has written many published articles, is an accomplished speaker and also stars in the YouTube channel “The Wright Solution”.