Starting your own business

About us Business Structures Business Plans Business Finance Flexible Business Loans Small Business Marketing Start an Internet Business Home Based Business Company Formation Accounting and Bookkeeping Business Zone Business Dictionary
Latest News : This RSS feed URL is deprecated      If You're Like One Third of Americans, You Considered Starting a Business But Didn't Do It. Here's Why Not - Inc.com      Business Mentor: Myths About Starting a Business - ABS-CBN News      Top tips for starting a business with no money - SME Magazine      'New blood needed' in Highlands as business start-up rates lowest in Scotland - Press and Journal      

Income and Expenditure

 

Forecasting Income and Expenditure

Most start-up businesses will have some form of profit measure in their statement of objectives. During the planning stages of a new venture, forecasting might be employed to demonstrate when the stated goals is likely to be achieved.

Levels of Income and Expenditure for a Start-up Business

Typically, such forecasts will depict a start-up business as having an excess of expenditure over its income in the early periods of trading. This is especially apparent in situations where a substantial capital investment is required to purchase stock, plant, carry out research or engage in large advertising campaigns.

Over time, as sales are made and their volume starts to grow, the levels of income vs. expenditure begin to reach equilibrium. Once this state is reached, earnings and revenues then begins to outpace outflows by an ever increasing amount.

At this stage, each sale achieved makes a contribution towards the fixed costs of the business and once volumes are sufficient, amounts earned then convert to the profits of the business.

Quick Business Loans

Profit and Loss Forecasts

Profit and loss forecasts should depict at which initial periods will be loss making, the estimated breakeven point and the levels of profitability which are achieved at the various stages of business activity.

 
Email This Page  Print This Page


 
 
Site Search
Take the 6 question quiz and test your knowledge on matters relating to starting your own business
1. Contribution is the difference between
 
Selling price and direct expenses
Turnover and net profit
Turnover and gross profit
Selling price and gross profit
  
Submit
 
Single Question Survey
Did you know that company formations can be carried out entirely online without any need for paper or written signatures?
 
Yes
No
  
Submit