Case Study 1: The Salad Bar Chain (03:39)
Tossed has six locations and would like to add more. Accountant Nigel Harris recalls the start of his working relationship with owner Vincent McKevitt. McKevitt obtained loans from several sources rather than selling shares, to retain full ownership.
Cash Flow (04:56)
A monthly forecast uses information about money coming in and going out to make predictions about the business’s future financial situation. This data is necessary to successfully open a new location.
Rapid Business Growth (04:14)
Rapid expansion can strain the cash flow of a business. The break-even point is when the value of sales covers all costs. Harris points out that existing revenue must be able to cover the costs of a new location.
Profit and Loss (04:02)
Gross profit is income less the cost of sales. Net profit is a final figure that comes after overhead costs are taken out. The balance sheet is a list of a company's assets and liabilities.
Case Study 2: SRA The Social Enterprise (05:09)
Stephanie Correia is the General Manager of Southside Rehabilitation Association. She provides people with an opportunity to develop work skills. She also helps them with social skills, concentration and confidence.
Cash Flow Forecast and Credit Control (04:25)
Once a budget is set, cash flow can be determined for the year. Budget paperwork starts with estimates and then gets populated with actual amounts as the business spends money.
Managing Cash and Unpaid Invoices (03:02)
Invoicing is an easy way to keep track of money. Cash can be stolen. Southside Rehabilitation Association implemented procedures around petty cash to stop theft.
Collecting Money Owed (04:13)
Harris talks about the advice he gives clients. It is important to understand numbers and have a financial plan for your business.
Forecasting and Budgeting (02:42)
Harris recommends not getting locked into one set of numbers when predicting business profits. Accurate financial information is fundamental and should be prepared in a timely manner.
Managing Your Currency (02:32)
Understand what short-term cash means. The company needs to forecast what their long-term cash requirements are. An owner should use reliable financial information.
Inventory and Caring for Clients (04:50)
Review your stock on hand regularly. If possible, order less stock but more often. A company should set minimum and maximum holding for each stock line.
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