Enterprise Lecture 8 - Stash the cash

Looking after your money.

• If you have the language people have more faith in you.
• INVOICE - the bill - your business address, customers address, invoice date, total amount due.
• STATEMENT - a reminder - day before due. Business address, customer address, list of recent invoices, details of invoices paid/unpaid, total amount due.
• TERMS AND CONDITIONS - (on back of invoice) to protect your rights and interests, costs, delivery arrangements, payment terms, what happens is orders are canceled, credit limits, right to charge interest or compensation on overdue amounts, commitment to quality.
• ACCOUNTING - keep track of who owes you money, see how much your spending, money in and out.
• Quickbooks, bank tree, Sage etc (accounting software). Any are good to start a small business and allow you to create a statement or your years business.
• ACCOUNTANT - certified or chartered. Chartered does more than tax return, large practice with money skills... pension scheme, advice on investments, train your accounting staff, more expensive. Certified - tax returns for small businesses - lower costs.
• START UP COSTS - one time, one off expenses, new equipment, website, register company name, logo, decorate premises, launch party, get a loan to cover these initial expenses, pay back each month over 2-3 years.
• WHERE DOES THE MONEY COME FROM?
• Banks
• Funding organisations and investors - Yorkshire Forward - regional development agency if employing others - small practice.
  
• WHAT THE BANKS NEED TO KNOW: 
• Marketing plan 
• How much you need
• How much you have - similar account to your need - sharing the risk. 
• How much you will spend
• How will you pay it back.
  
• INDIRECT COSTS - money that goes out regardless of business (known as overheads) utilities, insurance, rent, telephone, marketing.
• DIRECT COSTS - cost directly attributable to the manufacturing of products, or what the customer takes away from them.
• TANGIBLE ASSETS - physical existence and maintain substantial value even though depreciating at a calculable rate.
• INTANGIBLE ASSETS - copyright, trademarks, good will,, competitive advantage (often add up to more than the tangible assets).
• COST - anything you spend.
• PRICE - Money charged.
• CAPITAL - money, properties and valuable which collectively represent the wealth of an individual or business.
• CAPITAL ASSETS - money, properties and valuables.
• RECEIPTS - money coming in.
• PAYMENTS - money going out.
• CASH FLOW OR NET CASH FLOW - cash receipts minus payments (need this to show to the banks in order to get a loan). 
• TAXES - income tax - personal income, corporation tax - profits of limited company.
• VAT - on sales.
• COUNCIL TAX - value of property.
• BUSINESS RATES - value of business property.

WHAT TO DO:

• Open a seperate bank account.
• Find a certified accountant. 
• Find a local solicitior. 
• Register business with Inland Revenue.