Basic Cash Planning Example

Basic cash planning example Lets start with a simple example. Illustration 1 looks at the business from the point of view of money coming in and money flowing out. Sales and profits are out of the picture, (although sales influences money in and costs and expenses influence money out). In this very simple model, your sources of money are cash sales, payments from receivables, new loan money, and new investment. Your expenditures include buying widgets in cash, paying interest, paying bills as they come due (i.

e. paying accounts payable), and paying off loans.

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Illustration 1: Basic cash plan Even at this basic level, you can see the potential complications and the need for linking the numbers up with a computer. Your estimated receipts from accounts receivable must have a logical relationship to sales and the balance of accounts receivable. Likewise, your payments of accounts payable have to relate to the balances of payables and the costs and expenses that created the payables. Vital as this is to business survival, it is not nearly as intuitive as the sales forecast, personnel plan, or income statement.

The mathematics and the financials are more complex. SWOT ANALYSIS Strengths * Strong product supported by great tasking meals with a strong focus on quality, healthy and competitively priced meals in addition to the speed of producing meals * Strong brand, which has been tested before full implementation. Emphasis on a fund brand culture * Market conditions are favorable by offering new niche spark in an otherwise static market * Low development risk as the product currently exists Ability to capitalize on brand and concept with expansion through franchise and other market segments * Low management risk due to experienced team and the strong diversification of skills and expertise = holistic results * High gross margins on meal products, which can be maximized by negotiating bulk purchase agreements with wholesalers. Weaknesses * Defendability of concept as the meal products cannot be patented; this needs to be addressed by building strong brand awareness and establishing copyright on total quality system.

Focus also on rapid growth and securing prime sites in target markets * Site permits for street vending need to be established before implementation, but also private sites will be secured to reduce exposure to local government issues * Product may be vulnerable to weaken over time, which can be minimized through product innovation and diversification Opportunities * Niche-specific opportunities through monopolizing niche market by building strong brand awareness and leading the street food vending culture through being vigilant with other vending business opportunities. Restrictions on operating hours means there can be diversity of venues and access to a very diverse target customer group *

Capitalize on diversity of venues and consumer groups to promote and market expansion through event catering and franchise ownership * International expansion to Europe, which has a strong culture for street food vending and pre-prepared meals.

Target strategic partner for joint venture, master franchise Threats Local government regulations in relation to street vendors means permits secured have minimum life period, however change in this area is slow * Vulnerability to imitation products from competitors will be reduced through rapid development of products and brand. * Short-term site permits means the brand needs to be diversified through catering, franchise and supermarket placement * Seasonal demand meaning inconsistent returns. This can be minimized through diversifying brand through catering, franchising and a supermarket product line.