You can start a business in Georgia easily with the right resources. There are some questions to answer before you get started, like what kind of a business license do you need, do you need to register your business with the state, what tax structure is best for your small business, and other questions. Also, you should learn about labor laws and where you go to obtain the proper permits for your type of business. Georgia defines a small business as one which is independently owned and operated and must have either fewer than 300 employees or less than $30 million in gross receipts per year. How to Start: What Steps to Take Get an overview of starting your own business from the Small Business Development Center self-assessment, legal steps, building your team, financing your business and business plan preparation. View PDF STARTSMART Start your business with the right set of tools with STARTMART. View Site GROWSMART Realign your vision and improve performance with GROWSMART. View Site Get A Business License/Professional Business License Business licenses and sole proprietorships are obtained locally from your city hall or county courthouse. For professional licensing, go to the Secretary of State's website. Visit Site Get One-on-One Consulting Receive university-based knowledge and technical assistance from the Small Business Development Center at the University of Georgia. Visit Site Register My Business Corporations, limited liability companies, and limited partnerships in Georgia are formed by filing with the Corporations Division of the Office of the Secretary of State. Get the necessary forms, file online, find out about filing fees, and search businesses. Visit site Get Business Tax Requirements Learn about Georgia's business-tax types and information on audits, collections, rules and policies, and FAQs from the Department of Revenue. Visit Site Learn about Federal Tax IDs Apply for a federal tax ID, or Employer Identification Number (EIN), with the Internal Revenue Service. Visit Site Learn about Labor Laws Learn what Georgia employers need to know about COBRA, child labor, wages, workers' compensation, discrimination, family and medical leave, and more from the Office of the Secretary of State. Visit Site

This isn’t to say that there's anything wrong with starting a part-time business or starting a business when you are still working at a job. People have different energy levels and different capabilities. It’s just to say that to give yourself the best shot at starting a business, you have to be able to focus on it. So it’s the wrong time for starting a business if you are already experiencing a lot of turmoil or stress in your life. (Starting a business will be stressful in itself, even if everything goes smoothly.) If you are in the process of getting a divorce, have just lost your job, or are moving, for instance, it’s wise to put off starting a business until your life is once again on a more even keel. The best time for starting a business has nothing to do with how old you are. People of any age can start a business and you may be surprised to know that most small business owners in the U.S. are older; 51% of owners of small businesses are 50-88 years old, 33% are 35-49 and only 16% are 35 years old and under. It's not a matter of age - it’s a matter of where you are in your life and whether you’re ready and able to face new challenges. The Best Time to Start Depends on Your Readiness to Become an Entrepreneur Should you even start a business and become self-employed? There are many issues to consider before deciding to start a business: Your Personality - Not everyone has the required personality traits to thrive as a business owner. Aside from extensive knowledge about the particular industry, to be successful as a business owner requires self-motivation and a variety of organizational, management, and marketing skills, as well as the ability to deal with customers and vendors. See Do You Have the Characteristics of an Entrepreneur? for more information. Think you’re ready for starting a business but are concerned about whether or not you have the “right” traits and attitudes to be an entrepreneur? Read Want to Start a Business? Here are the 6 Traits You Need to Be Self-Employed.

First of all, we look at a small business as any company with under 500 employees. Although we have helped much larger companies, this is our sweet spot. As a small business marketing consultant, basically we do everything you need when developing and implementing your marketing plan including designing your brand, choosing your channels, developing your business assets and sharing your message with the right audience. We like to think of ourselves as a one-stop shop. We love the process of both traditional and internet marketing and we understand you need more that just advice, you need a trusted partner, that actually creates all the assets you need, implements the strategy, and monitor the process so you can see the results your small business needs! Internet Marketing is all about getting found on the web using a synergistic approach. We specialize in all of the major categories needed for a successful internet marketing campaign that work together to get you found by people searching on the web. Then we use various approaches to turn those people into paying customers. Some of the tools we use are: Website Creation Blogging Search Engine Optimization (SEO) Social Media Online Paid Ads Landing Pages Online Press Releases Email Marketing Traditional marketing involves a clear understanding of your brand and your message to the public. It is more than the simple communication of who you are and what your service or product is. Marketing encompasses everything about your contact with your customer, from the moment they are introduced to your company, to every contact they have with your employees. Key parts include: Corporate Identity Message Creation Branding Public Relations/Reputation Management Telemarketing At Half a Bubble Out we look at advertising channels like tools in a toolbox. A good marketing strategy typically involves using a variety of advertising channels, with a clear understanding of the purpose for each. At Half a Bubble Out we look at advertising channels like tools in a toolbox. We want to make sure that we evaluate all the available tools and choose the best tools for the job. Video/Commercial Production Print Radio Direct Marketing Outdoor Advertising Media Buying and Placement Graphic Design Being your Small Business Marketing Consultant is at the heart of everything we do. We are invested in wanting our clients to wildly succeed in their businesses and we offer our consulting services as needed to assist in that success. Our consulting services include: Business/Organization Development Business Promotion Strategy Marketing & Business Plans Ongoing Strategic Counsel Have you given any thought on how hiring a public speaker can help your business? Michael and Kathryn Redman can speak at your next work event on an array of different topics. These topics include but aren’t limited to: marketing, advertising, company culture, leadership development, passion & provision and communication. Here are a few of the venues you can consider hiring for our public speakers: Conferences Company Retreats Employee Trainings Seminars If you would like to learn more about the value that Michael and Kathryn can bring to your next event, then give us a call. You Choose Which Services are Right For You A fun aspect of partnering with Half a Bubble Out as your small business marketing consultant is that you don’t have to do it all. As your marketing consultant we love to partner with you to help you choose the services that are right for your small business.

Photo: Carol Kaliff / Hearst Connecticut Media Monica Guevara, center, is part of a panel during a seminar called "Access to Capital for Small Business" held at Western Connecticut State University Tuesday, Nov. 1, 2016. Also on the panel are Nelson Merchan, left, and Sheila Hummel. Robert Barghause, instructor of finance at the university, far left, is the moderator. lessMonica Guevara, center, is part of a panel during a seminar called "Access to Capital for Small Business" held at Western Connecticut State University Tuesday, Nov. 1, 2016. Also on the panel are Nelson ... morePhoto: Carol Kaliff / Hearst Connecticut Media A seminar called "Access to Capital for Small Business" is held at Western Connecticut State University Tuesday, Nov. 1, 2016. Photo: Carol Kaliff / Hearst Connecticut Media Photo: Carol Kaliff / Hearst Connecticut Media A seminar called "Access to Capital for Small Business" is held at Western Connecticut State University Tuesday, Nov. 1, 2016. The seminar, moderated by Robert Barghause, instructor of finance at the university, left, included Nelson Merchan, Monica Guevara and Sheila Hummel. lessA seminar called "Access to Capital for Small Business" is held at Western Connecticut State University Tuesday, Nov. 1, 2016. The seminar, moderated by Robert Barghause, instructor of finance at the ... morePhoto: Carol Kaliff / Hearst Connecticut Media DANBURY — Hoping to land a small-business loan? Have a solid, bulletproof business plan in hand when you approach a lender. Don’t lie about or hide any financial issues. Be involved with your business. Beware of Internet lenders. Those actions were among the recommendations of panelists at the “Access to Capital for Small Business” event held last week at White Hall on the campus of Western Connecticut State University. The event featured two discussions: one on traditional sources of capital, such as banks, and another on nontraditional sources, such as state or nonprofit agencies. Michael Sauvageau, who owns the startup business Noteworthy Chocolates in Bethel with his wife, Jennifer, received $28, 000 in a kickstarter campaign to get the company off the ground. The problem is, the couple has spent $40, 000 already. They are seeking a small-business loan for supplies, packaging and marketing. “Marketing is the way you get the name out there so we need some money for that, ” Sauvageau said after attending the event at Western. “We spent last year incubating this and dipping into our savings. The idea is to get capital for a buffer, but lenders want you to have a history and we’re a startup. We understand banks don’t want to take risks and startups are inherently risky. It’s tough to get access to capital unless you have a rich uncle, which we don’t.” Sauvageau said he spoke with a banker following the event and has a meeting set up to discuss a loan application. He remains optimistic about his prospects. “We have infinite faith, ” he said. “It just takes time to get things going.” It’s good to have faith, but it takes much more to get an idea off the ground and obtain the funding to help do so. For starters, it takes a solid business plan. “Get that business plan in working order, whether you’re seeking traditional or nontraditional lending, ” JoAnn Cueva, director of the Greater Danbury Chamber of Commerce, said as she delivered the event’s closing remarks. “It’s a key component when seeking a loan.” The business plan is such a vital part of the loan application process that each of the six panelists at the event last week discussed the importance of having a good one. “I’m a big fan of the business plan. That’s the map of where your business will go, ” Monica Guevara, director of underwriting at Valley Economic Development Center. “Know who your customer is, put in your experience, and give projections and assumptions. But also tell us how you got to those numbers. It’s not just putting numbers in there; substantiate them.” Valley Economic Development Center is an alternative lender for small businesses. The nonprofit organization is a place to turn when banks or government loans are not approved. Rates for loans from her organization are generally higher than traditional loans. A good business plan is not necessarily a long one, however, said Sheila Hummel of the state’s Department of Economic and Community Development. The DECD offers a variety of financing options, including the Small Business Express Program designed to spur job creation in the state. “Be as concise as possible. You don’t need a 40-page business plan, ” she said. “For a startup business, it’s so important to have a solid business plan.” Hummel said her agency has funded 22 businesses in Danbury but she’d “like to see more.” For small-business owners struggling with their business plan, free help is available through the Connecticut Small Business Development Center. The SBDC offers advice to small-business owners on topics such as business evaluations and plans, financial projections, access to capital, state incentives, marketing and what it takes to start a business. The advice is free as a service of the Small Business Administration. Nelson Merchan is the local SBDC business adviser and holds office hours, by appointment, at the Greater Danbury Chamber of Commerce, Danbury Innovation Center, Newtown Library and Brookfield Chamber of Commerce. Visit and register at “request business advising” to set up an appointment. “The business plan is key, but before you do a business plan, do a business evaluation. It’s less time and money. If the evaluation shows good potential, then move on to the business plan, ” Merchan said. “We can also work on financial projections. We want to see the numbers. Make sure you keep them reasonable.” Hummel, Guevara and the three banker panelists all stressed open communication and honesty when it comes to applying for a small-business loan. “Tell us everything, ” Darren Piper, vice president of commercial lending at Savings Bank of Danbury, said. “The quickest way to have a deal turn sour is for the lender to discover something that wasn’t disclosed by the borrower. It may not seem like a big deal to you, but be open, honest and up front. If it’s not on the tax return, it doesn’t exist.” Vincent DiGilio, vice president at Union Savings Bank, added: “Communication is important, but it’s on the banker to make sure there are no surprises.” While the bankers, including Anthony Giobbi of Newtown Savings Bank, said they like building relationships and giving loans to small businesses, they can’t approve all the applications because of their fiduciary responsibility to customers. “That’s why the regulations are sometimes onerous, ” Giobbi said. “At the end of the day, we want to make sure our depositors’ money is safe.”

Created in 1953, the U.S. Small Business Administration (SBA) is the only independent agency of the federal government with the sole purpose of assisting small businesses to start, grow, and prosper. Through their extensive network of SBA resources and partnerships with other public and private organizations, SBA is here to help you - the small business owner. The Richmond District Office assists hundreds of small businesses each year by providing financial assistance and technical training through a variety programs. In FY 07, the Richmond District Office assisted more than 18, 900 people through training, counseling and business-development programs. In FY 08, our office approved 900 loans totaling over $235 million. The Virginia SBA Office has renewed its commitment to forming a closer partnership with lenders, service providers and with the community at large. The Chesterfield County Economic Development Office works closely with the Richmond District Office and area lenders to provide information and access to these valuable programs for Chesterfield businesses. RISE Shines Richmond Indoor Sport Experience (“RISE”), shines as it experiences its fifth year of success as a world-class indoor sports facility. The 48, 000 square feet facility features two playing arenas used for soccer, lacrosse and field hockey as well as a baseball academy on the 2nd floor. Located off Route 288, 2300 Oak Lake Blvd. in Midlothian, Virginia, RISE draws patrons from a variety of leagues, sports, cultures and geographic areas in the greater Richmond area and beyond. Six years ago, four families of young athletes brainstormed about providing space to serve the soccer community especially during the winter season or bad weather. Soccer, field hockey and lacrosse athletes especially echoed their need for such a facility. These families ultimately decided that they would pursue creating such a facility in the Richmond area. Neil Carns, a member of one of the families and President, stated, “It couldn’t have been done without the SBA and Crater Development Corporation. Declines were received from five lenders before we were able to strike a deal.” RISE was originally financed through the SBA’s 504 program and Crater Development Company. The SBA 504 program provides growing businesses with long-term, fixed-rate financing for acquisition of major fixed assets such as land and buildings. Crater Development Corporation (CDC) is a nonprofit corporation set up to contribute to the economic development of the community. CDCs work with the SBA and private sector lenders focused on providing financing to small businesses. Typically, a 504 project includes a loan secured with a senior lien from a private-sector lender covering up to 50 percent of the project cost, a loan secured with a junior lien from the CDC (backed by a 100 percent SBA-guaranteed debenture) covering up to 40 percent of the cost, and a contribution of at least 10 percent equity from the small business being helped. RISE has a knack for bringing the community, events and people together. First, it brought together four families addressing concerns for winter soccer sports conditioning. The outcome was the development of the successful business, Richmond Indoor Sports Experience that employs 4 full time employees and up to 30 plus part time. Next, it built a community of various interested parties regarding diverse sports programs. This resulted in the establishment of a relationship with sports groups who played on indoor turf fields. Currently, there is a strong and supportive association with Richmond’s growing Lacrosse and Field Hockey population and the baseball training facility. There are also many cultural and language bridges in existence at RISE as evidenced by the Hispanic league that utilizes its facility. A click on the RISE website [ reveals bilingual links in both Spanish and English. RISE is a place of cultural diversity. A variety of nations’ flags fly from the rafters at the RISE facility and suggest that Spanish is by no means the only language you may hear from players and families that come to support them. Soccer hosts an international world of fans and you will find RISE patrons from around the globe. Also, with Valentine’s Day close, there may even be a romantic component since one of the most popular leagues is the coed Social Night League. In coed play, RISE appears to be both community and family friendly. Carns was asked whether RISE favors certain soccer leagues that are larger or more established. To this Carns quipped, “We, at RISE, fly the Swiss flag of neutrality.” “We’ve made a commitment at RISE to enhance the quality of community life by providing a clean, safe, family-oriented environment that people can use year-round, ” says co-owner Vanessa Carns. And from all accounts, they do.

Since its founding on July 30, 1953, the U.S. Small Business Administration has delivered millions of loans, loan guarantees, contracts, counseling sessions and other forms of assistance to small businesses. SBA was officially established in 1953, but its philosophy and mission began to take shape years earlier in a number of predecessor agencies, largely as a response to the pressures of the Great Depression and World War II. Early Versions of SBA The Reconstruction Finance Corporation (RFC), created by President Herbert Hoover in 1932 to alleviate the financial crisis of the Great Depression, was SBA's "grandparent"; The RFC was basically a federal lending program for all businesses hurt by the Depression, large and small. It was adopted as the personal project of Hoover's successor, President Franklin D. Roosevelt, and was staffed by some of Roosevelt's most capable and dedicated workers. Concern for small business intensified during World War II, when large industries beefed up production to accommodate wartime defense contracts and smaller businesses were left unable to compete. To help small business participate in war production and give them financial viability, Congress created the Smaller War Plants Corporation (SWPC) in 1942. The SWPC provided direct loans to private entrepreneurs, encouraged large financial institutions to make credit available to small enterprises, and advocated small business interests to federal procurement agencies and big businesses. The SWPC was dissolved after the war, and its lending and contract powers were handed over to the RFC. At this time, the Office of Small Business (OSB) in the Department of Commerce also assumed some responsibilities that would later become characteristic duties of SBA. Its services were primarily educational. Believing that a lack of information and expertise was the main cause of small business failure, the OSB produced brochures and conducted management counseling for individual entrepreneurs. Congress created another wartime organization to handle small business concerns during the Korean War, this time called the Small Defense Plants Administration (SDPA). Its functions were similar to those of the SWPC, except that ultimate lending authority was retained by the RFC. The SDPA certified small businesses to the RFC when it had determined the businesses to be competent to perform the work of government contracts. By 1952, a move was on to abolish the RFC. To continue the important functions of the earlier agencies, President Dwight Eisenhower proposed creation of a new small business agency - Small Business Administration (SBA). The Founding of SBA In the Small Business Act of July 30, 1953, Congress created the Small Business Administration, whose function was to "aid, counsel, assist and protect, insofar as is possible, the interests of small business concerns."; The charter also stipulated that SBA would ensure small businesses a "fair proportion"; of government contracts and sales of surplus property. By 1954, SBA already was making direct business loans and guaranteeing bank loans to small businesses, as well as making loans to victims of natural disasters, working to get government procurement contracts for small businesses and helping business owners with management and technical assistance and business training. The Investment Company Act of 1958 established the Small Business Investment Company (SBIC) Program, under which SBA licensed, regulated and helped provide funds for privately owned and operated venture capital investment firms. They specialized in providing long-term debt and equity investments to high-risk small businesses. Its creation was the result of a Federal Reserve study that discovered, in the simplest terms, that small businesses could not get the credit they needed to keep pace with technological advancement. In 1964, SBA began to attack poverty through the Equal Opportunity Loan (EOL) Program. The EOL Program relaxed the credit and collateral requirements for applicants living below the poverty level in an effort to encourage new businesses that had been unable to attract financial backing, but were nevertheless sound commercial initiatives. SBA Today SBA has grown significantly in terms of total assistance provided and its array of programs have been tailored to encourage small enterprises in all areas. SBA's programs now include financial and federal contract procurement assistance, management assistance, and specialized outreach to women, minorities and armed forces veterans. SBA also provides loans to victims of natural disasters and specialized advice and assistance in international trade.

Before you can begin business with the government your business must obtain the proper certifications. Small business certifications are like professional certifications; they document a special capability or status that will help you compete in the marketplace. Unlike permits and licenses, you do not need to obtain certifications to legally operate. However, in order to take advantage of business opportunities, such as government contracts, you may need to obtain some certifications. Federal, state and local governments offer businesses opportunities to sell billions of dollars worth of products and services. Many government agencies require that some percentage of the procurements be set aside for small businesses. Certifying your business can definitely help you successfully compete for government contracts. How to Certify as a Small Business The Federal government sets aside certain contract bid opportunities exclusively for small businesses. In order to compete for these contracts, you must first register as a vendor with the government. The US Small Business Administration defines a "small business" in terms of the number of employees over the past year, or average annual receipts over the past three years. Size standards vary by industry. Visit Am I a Small Business? to find out if you can be classified as a small business. References on this page to the System for Award Management (SAM) will go into effect on July 29, 2012 until then please continue to use the Central Contractor Registration (CCR), and the Online Representations and Certifications Application (ORCA), to register your business with the government. SAM will replace CCR & ORCA on July 29, 2012. For more information on SAM visit If you or your customers require any assistance (troubleshooting, data concerns, general information, etc.) with SAM contact the Federal Service Desk at fsd.gov or by telephone at 1-866-606-8220.

Sarrica's Market is a new business located in downtown Moab, Utah. The store is an upscale international grocery and delicatessen with a distinct menu that includes authentic, hard to find ingredients from around the country and the world. The facility will include a sixteen person capacity eating area, deli/kitchen with counter and check out area, grocery/gift area, and a public restroom. The mission of Sarrica's Market is to provide Moab, Utah's residents and visitors with a combination of quality, authentic, hard to find, grocery items and prepared foods, with good service and a pleasant atmosphere with the warm feel of an Old-World outdoor market. Our store motto is, "eat and enjoy." The deli will serve sandwiches, salads, specialty drinks, and picnic lunches. Gift items will complement the international theme of the store and include a limited selection of kitchen wares, cookbooks, picnic items, and original hand-sewn items and jewelry. Gift baskets will also be available in the store and over the internet. All the recipes used in the deli will highlight the grocery items sold in the market. The gourmet and specialty foods market is booming across the country. Consumers are looking for quality food coupled with a quality shopping experience. Many large cities have have entire sections dedicated to ethnic foods and culture. As rural America moves away from agriculture and natural resources, and towards tourism as its main economy source, more and more people are flocking to areas such as Moab. These new populations are starved for the fine ingredients they were able to purchase in big cities and are looking for a rural solution to this problem. Moab's residents and many visitors have expressed the desire for a local gourmet food store. By making alliances with local farmers and restaurants, as well as international distributors, Sarrica's Market will give customers a combination of "shopping local" and wide gourmet selection previously unavailable in this highly visited rural area. For residents, Sarrica's offers a more convenient and appealing option than ordering online or lugging fancy groceries back from infrequent trips to the nearest cities (several hours away), especially in winter. Sarrica's projects net profits increasing over the first three years. The increasing profitability is partly based on expectations that wide seasonal differences in sales levels in the first year will moderate as we strengthen our local clientele base. These forecasts are based on the recent performance of similar cross-market upscale stores in Moab, and general trends in the gourmet food stores industry. To achieve our objectives, the owners of Sarrica's Market are contributing $24, 000 and seeking a $100, 000 small business loan. These loans will be used for start-up costs and will be paid back from the cash flow of the business within five years. 1.1 Mission The mission of Sarrica's Market is to provide Moab, Utah's residents and visitors with an upscale grocery store, gift shop, and delicatessen specializing in a combination of quality, authentic, hard to find, grocery items from around the world.

If your first thought when hearing the words "business plan" is "yuck", then you're not alone. For most people, the thought of writing a business plan brings up painful memories of past homework assignments and many online store owners view them as something only "real world" businesses and Silicon Valley startups need. And lets face it, there's all that fun marketing stuff you could be doing like taking product photos, writing blog posts and opening social media accounts. But the truth is, the fun stuff will only be meaningful if you build your business on a strong foundation. And that's where writing a simple business plan comes in. Why You Need a Business Plan Even if you don't actually need funding for your business or need to submit a business plan to anyone, there are still some compelling reasons you should consider writing one for yourself. For example, let's say that you're just starting out. You've created an online store, you may even be making some sales. Creating a business plan at this stage could help you see the bigger picture and chart a strategic course for future growth. Or maybe you're five years into running your business and you're starting to feel stuck and things are beginning to plateau. Creating a business plan at this stage could help you think outside of the day-to-day grind of running of your business and discover new ways to market it or new products you could be selling to boost revenue. On the flip side, maybe your business is trending downward. Creating a business plan in this scenario could potentially help you either change the way your business works as a whole or cut your losses before you're in deeper trouble. The point is, if you haven't written a business plan, you should take the time to do so, no matter what point in your business's lifecycle you're in. And the best part? It's not that hard. Let's look at how you can do it. Components of a Good Business Plan Remember, if you're just doing this for yourself, there's no need to go overboard and turn this into a major project that holds you back from launching and making some initial sales. Think of it as something designed to help open up some ideas for your business and shed light on some angles that maybe you haven't thought of yet. In the future, if you actually need to submit a formal business plan to someone, you could always use this one as a starting point and spruce it up as opposed to having to start from scratch. The key areas of a business plan include the following. Find out how defining each can help your business. Executive Summary - While it's the last thing you will write, it's the first part of the business plan. This part summarizes the main highlights of the rest of the sections. Company Description - This is a high level overview of your company, products or services, types of consumers, and competitive advantages. Ultimately, think of it like what you would tell someone in an elevator ride about your business if you wanted them to invest in it. Also known as an extended elevator pitch. Market Analysis - This is your research about your industry and target market. If you haven't formally defined your target customer, this will help you do so. Operational Plan - This covers the day to day operations of your business, from location and hours to inventory and accounting. As you go through this, you can make sure that each of the vital processes in your business are running as smoothly and efficiently as possible. Organization & Management - This tells people about the main players in your business - who owns it, who manages it, etc. It will help you define all parties involved with the foundation of your business so everyone has a clear understanding of where they fit and who does what. Products & Services - This is where you describe the products and services offered by your business. You should think about them from your customer's perspective. It will help you to better sell your products and services once you've defined them using this approach.

Let's look at an example of a simple cash flow forecast for an example start-up. Example – Sophie & Jack Experienced interior designers Sophie and Jack decide to go into business together. They enter into a partnership, with each of them investing £5, 000 into the business. Their "product" is a home-makeover service, modeled on the popular daytime television programmes where ordinary households are transformed through small building work and decoration. Revenues: Sophie and Jack expect to gain 2 projects per month for the first 6 months of trading; each project will generate £5, 000 of sales. Customers will be expected to pay 25% of the price as a deposit with the balance on completion. Each project is expected to last one month. The main costs associated with the start-up are: Equipment - £2, 500 (month 1) & £2, 500 in month 4), a total investment of £5, 000 Marketing - £500 per month Legal and accounting costs - £1, 250 (month 1) Project materials – £1, 500 per project (i.e. £3, 000 per month). It is assumed that suppliers will allow Sophie & Jack 30 days to pay for these costs Sub-contracted labour (other tradesmen) - £4, 000 per month. These will be paid in the month incurred. Sophie & Jack will pay themselves a salary of £1, 000 each per month whilst the business is established. Other sundry costs of £500 per month have been assumed Putting these assumptions into a cash flow forecast produces the following results: The format of the cash flow forecast above is typical of the style used by most small businesses. You may come across different layouts and headings, but don't worry. The important thing is to understand the main information contained in the forecast and to be able to analyse what the figures show. So, let's take a look around the structure of the cash flow forecast: Cash inflows – these are the movements of cash into the business. The investment by Sophie and Jack into the partnership is a one-off cash inflow whereas the payments by customers are regular sources of cash. The challenge for Sophie and Jack is to ensure that customers pay on time. Delayed payments, for whatever reason, can seriously affect the cash flow of a small business. In the forecast above, the monthly cash inflows are around £10, 000 p/m and total £62, 500 for the first six months of trading. Note that this total for cash inflow is not the same as sales. Those cash inflows include £10, 000 of investment into the partnership. Cash outflows – these are movements of cash out of the business . An important part of estimating cash outflows is to ensure that a prudent (or cautious) view is taken about both the size and timing of payments. Have all costs been taken into account? Will suppliers really offer 30 days credit before payment is required? A sensible cash flow forecast allows for what is known as "contingencies" – i.e. unexpected costs or higher than expected payments. Looking at Sophie & Jack's cash flow forecast, the monthly cash outflows are typically around £9, 000 except for a couple of months where some investment in equipment increase the amount of cash going out of the business. Net cash flow – this is simply the difference between the total cash inflows and the total cash outflows. Net cash flow will vary by month. When looking at a cash flow forecast in the exam, always remember to look for months in which there is a net cash outflow (i.e. a reduction in the cash balance of the business). If there is a cash outflow, the questions you should ask are: Does the business have enough cash left after the outflow (look at the closing balance) If not, does the business have access to a bank overdraft You can see from Sophie & Jack's cash flow forecast that there is a small net cash inflow each month except in April when there is a net cash outflow of £1, 500. Net cash outflows are often caused by one-off payments (e.g. buying equipment, paying tax such as VAT) or where seasonal falls in sales mean that cash inflows are not strong. Opening balance – this is simply the balance in the bank at the start of a period. For a start-up, the opening balance is zero. As soon as investment funds are added to the bank, then the cash flows begin! Remember that the opening balance in any one month should equal the closing balance at the end of the previous month. Closing balance – this is the amount in the bank at the end of the month. In the BUSS1 exam, you might be asked to calculate the closing balance. The formula for the closing balance is opening balance + net cash flow. During your studies you should try to look at several different kinds of cash flow forecast like the one above. It is important to build your confidence looking at the numbers – seeing how they are calculated and then making some judgements about what the numbers mean!