Mastering finance – Mark Gardner, Mentoring Manager, Transmit Start-ups. A short breakdown of the basics of financial planning, cash flow forecasts and preparing your business for investment. Overview: The Digital Business Academy is a free initiative from Tech City UK and UCL, created to help the nation gain FREE digital business skills. DBA offers a range of specialist digital business courses- ranging from building brands to running online campaigns, developing digital products to raising finance- providing an easy way to gain the business skills you need for a digital world. So whether you dream of being your own boss or want to get hired by a digital business, we’ve joined forces with leading names in the industry to give you the opportunities you need. Link: http://www.digitalbusinessacademyuk.com/

1. Start-Up Finance Session
Money, Money, Money

2. Start-Up Session
Master Finance for your
BusinessThe course is designed to demystify the key financial concepts you’ll need to
start, run and grow a successful new business
About the course
From cash flow forecasts to knowing when to raise capital for your company,
the world of finance can be daunting. The course will explain basic financial
concepts using real life examples.
You will learn about:
•Basic profit and loss accounts, balance sheets and cash flow statements
•Ownership structures and how to divide equity (shares) in a startup fairly
between founding team members
•Pitching for investment, raising capital and finance for startups
•Valuation methods for pre-cash flow new ventures
•Using crowdfunding platforms

3. Start-Up Session
Who is here?
• Who is already trading?
• Who is going to start a business?
• Who enjoys the financial aspects of business?
• Who is scared by the financial aspects of business?
• Who uses an accountant?

4. Start-Up Session
Overview
• Raising Finance
• Understanding your finances
• Cashflow
• Record Keeping
• Help & Accountants

5. Start-Up Session
• https://youtu.be/hJDRKy04I8s

6. Start-Up Session

7. Start-Up Finance

8. We need
confidence in the
person and the
proposition.
We need to know
that your business
will thrive, so that
you can sustain
yourself and make
repayments.

9. Start-Up Session

10. Pay
yourself!
Start-Up Session
It is important to understand how your
business finances work … WHY?
Flexible /
Adaptable
Take action,
before it’s
too late
Set budgets
See what
works (and
what
doesn’t)
Review
pricing
Contingency Save for tax

11. Start-Up Session

12. Start-Up Session
What is a cash flow forecast?
A cash flow forecast is an
estimation of the money you
expect your business to
bring in and pay out over a
period time. It should reflect
all of your likely revenue
sources (like sales or other
payments from
customers) and compare
these against your likely
business expenses (like
supplier payments, premises
rental and tax payments

13. Start-Up Session
• How do I complete my cash flow forecast?
• A cash flow forecast is made up of three key sections:
• 1. Revenue – money coming in
This section is where you list any money that you have
coming in to the business such as product or service
sales, equity or other investments and your Start Up
Loan. The number of items you include will depend on
your business model, but a typical revenue section
includes between three and six items.
• You add all of these sources together to figure out your
total income (A).

14. Start-Up Session
2. 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.
You’ll need to think about costs that do not occur on a regular
monthly basis, like V.A.T. which is only payable every quarter.
Don’t forget to include things like your own salary, Start Up
Loan repayments, or specialist expenses you are likely to
incur. 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.
You add all of these sources together to figure out your total
expenses (B)

15. Start-Up Session
• 3. Net cash flow – the balance
• This final section is the difference between your total
revenue (A) and your total expenses (B).
e.g. “total income (A) – total expenses (B) = Net cash
flow”
• 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.

16. Start-Up Session
• Make sure you understand the difference between
revenue and expenditure.
• 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. You may
like to include separate line items for your individual
products or product categories, particularly if each
product contributes a significant amount of revenue.
• Expenses, or costs, are the items you’ll need to pay for
in order to produce and/or deliver your products or
services, promote and manage your business.

17. Start-Up Session
• Remember that some of your costs will be fixed
and others will be variable.
• A fixed cost is one that doesn’t change over the
course of the forecast. For example, your premises
rent, insurance and Start Up Loan repayments etc.
• A variable cost is one that changes according to
your needs. For example, supplier costs, material
costs, venue hire, printing and travel expenses etc.

18. Start-Up Session
Think about the promotional activities you’ve got
planned and the sales you expect these to generate.
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. Equally, if there are certain periods where
you won’t have a large marketing budget in place,
think about the impact this is likely to have on your
sales.

19. Start-Up Session
Plan for seasonality and base your figures on a range of
typical scenarios (like quiet or busy periods)
Seasonality doesn’t affect everyone in the same way. For
example, if you’re starting a business in an area that has
a booming tourist economy in the summer months but is
very quiet during winter, this should be reflected in your
forecasted sales figures and costs.
Even if seasonality doesn’t affect you in this way, every
business goes through quiet periods (with less sales) and
busy periods (with more sales). Depending on your fixed
and variable costs, this may create more or less pressure
on your cost base during this period.

20. Start-Up Session
• Our top tips for creating your cash flow forecast:
• These tips have been prepared by our Business Advisors and
loan assessment team to help you understand some of the
key things that will strengthen your application:
• Be realistic in terms of how many sales you expect to make
While it is great to be ambitious for your business, it’s
important to be realistic. Particularly in the early stages of
trading, you may find that you aren’t able to make as many
sales while you’re focusing on building up awareness about
your product or service. It’s always better to make
conservative estimates and over exceed your targets, than
find yourself overcommitted or under prepared

21. Start-Up Session
• Don’t forget to include the following items in your
cost calculations:
• The salary you will require from the business !
• If you will not be earning any other forms of
income while you start and grow your business you
are likely going to need to draw on some of your
business earnings to support yourself. The
minimum salary you require needs to be included
in your cash flow forecast as one of your expenses,
along with any other staff salaries.

22. Start-Up Session

23. Start-Up Session
Getting Paid (and on time)
• Every business suffers from bad debt
• Don’t be afraid to ask for payment
• Make your payment terms very clear
• Take deposits or staged payments
• Incentivise prompt payment
• Invoice/Statement reminders

24. Start-Up Session
Controlling Expenses
• Set budgets
• Be lean (and mean when needed)
• Determine the best time to pay bills
• Review regularly
• Services
• Suppliers
• Price tiers, discounts

25. Start-Up Session
Record Keeping
• Sales invoices
• Purchase invoices / Receipts
• Business expenses

26. Start-Up Session
Record Keeping
•Have a system
•Shoebox
•Ledger
•Files/Folders
•Spreadsheet
•Software
•Update regularly

27. Start-Up Session
What help is there?
•HMRC/ www.gov.uk
•Book keepers
•Accountants
•Banks (overdraft etc.)
•Other financial services
• e.g. invoice factoring

28. Start-Up Session
Should you use an accountant?
• Is time becoming an issue?
• How organised and diligent are you?
• Do you have any “complicated” financial issues?
• Do you know the best way to draw money from
your business?
• Do you keep up to date with changes in legislation?
• What is the opportunity cost to your business?

29. Start-Up Session
Choosing a good accountant
Ask People
Look for
reviews
Talk / Free
consultation
Are they
interested
in you &
your
business
Experience
in your
sector
Networks /
Connections

30. Start-Up Session
Summary
Have a plan
Set budgets/targets
Keep records
Seek advice
Know YOUR Business
YOU are accountable!

31. Start-Up Session
Transmit Start Ups
• https://youtu.be/hJDRKy04I8s 30 second video of
who we are and what we do!
Delivery Partner since late 2012
-Team of 20 in Gateshead (HQ)
-New offices in Glasgow & Edinburgh
-Funded over 1400 entrepreneurs
-£13m+ loan book

32. Any questions?
Mark Gardner
Mentoring & Partnership Manager
0191 4909328
Mark@transmitstartups.co.uk
www.transmitstartups.co.uk
http://www.digitalbusinessacademyuk.com/rewards

33. Start-Up Session