Calculating cash flow

Vikram and his spreadsheet

Having Vikram in to talk about finances was more exciting than I was expecting it to be.

Once he gave us the cashflow template and we started inputting numbers and calculating how much certain expenses were it gave me a good idea of how much money you need to make things happen.

When doing the research for my business plan I realised how useful this cashflow would be as it already had what we needed to configure within it. I then went on to slowly research how much everything was and came up with a figure on how much investment I need.

I'm not going to share with you my personal spreadsheet but here is the template.

Vikrams Tips

For bookkeeping use Xero because it links to your bank account and is quite intuitive.

Use cashflow forecasts, Budgets, Balance sheets, keep Profit and Loss accounts and year end accounts. To keep up to date and be able to manage everything now. He says that she see so many designers that have started and haven't created business accounts or haven't done a cashflow and kept on top of their finances and end up in a financial mess and a lot of the time, debt.

Even if you aren't paying VAT because your below the registration threshold of £85,000, consider it when you do your pricing because you're not going to want to up your prices for your customers when you reach that point.

If your company makes a loss you can offset your profit the next year affecting how max tax you pay.

Hiring freelancers is cost effective because you don't pay them for holiday, they're good to hire on projects. I think hiring freelancers is a great idea because fashion is such a project based timetable and as a company we will need different people throughout the year.

The numbers make starting a business feel real and exciting predicting your finances, coming from a non mathematical person, use your spreadsheet.