Helping your business with its finances… free of charge26th April 2021
Alex Mason worked in recruitment for many years but always knew that he wanted to set up and run his own business doing something he was truly passionate about.
First, he needed an idea…
That arrived after he became a dad in 2020. His daughter started teething and he couldn’t find a teether that seemed to soothe her, so he decided to create his own.
Many months of research and testing followed and Alex is extremely excited to be launching The Molar Bear this summer (www.molarbear.co.uk), a friendly teething toy designed specifically for babies and small children of varying ages and stages of development.
However, Alex also knew that having a great idea and even a great product isn’t enough to create a thriving business – you also need a sound financial footing.
That’s why he turned to Work Avenue. Alex met with business adviser Kim Davidson who has experience working with new and existing entrepreneurs, to help with all aspects of his business. Work Avenue’s services are free of charge and focus on all aspects of business planning including some of the financial considerations below:
Understanding the costs of setting up and running the business: Set up costs can be very high. So talking about them can help a person understand whether they have enough money to invest in their idea. Overall business costs are considered and how these may change over time.
Raising finance: Where a business does need investment, whether to get started or to grow, entrepreneurs are supported to help them identify sources of funding and how this can be secured.
Sales income: It is important that every business knows how many products or services it needs to sell each week or month in order to cover its costs and make money, and whether this is viable.
Profit: This is key: how much a business need to charge for a product or service to make a profit. Understanding the difference between gross and operating profit can make a huge difference to a start-up.
Monitoring expenditure and keeping records: Keeping track of the numbers and expenses is critical, as is credit control – invoicing clients and chasing payments. Without this many businesses struggle.
Cashflow: This is something many businesses overlook. But planning, and making financial projections is vital. Identifying costs that a business owner may have not considered, eg: VAT or buying stock, and the impact on cashflow is crucial to ensure business sustainability.
Alex had several meetings with Kim regarding his financial details and viability of the business, which made all the difference in getting The Molar Bear off the ground.
He said: “Kim went through the cashflow forecast with me and helped me work out the cost of producing each product, which in turn helped to determine my profit margin at different prices. It was so useful to go through this process and clarify my business finances.
It is vital to have a solid understanding of the financial viability of an idea, the costs of running a business, what the possible sales income needs to be and how to make a profit.”
As well as working with clients on a one-to-one basis, Work Avenue also runs a variety of free workshops. So if you’re looking to start or grow a business, and want more information on Work Avenue’s free business advice and courses, please visit www.theworkavenue.org.uk/business