Cash Flow- (Financial Forecast)- Final Draft and Further Research

To do the cash flow properly it was necessary to research some things to give us a more accurate idea of what things cost, some things will be estimated but i will go through all income and expenditure and explain this here:

Income

This list is not exhaustive- the below headings are explanations of some parts of the cash flow where i felt i needed to elaborate.

Beginning Cash Balance

This is the business loan that was taken to cover the initial start up costs and give us some cash until the business starts taking an income.

Photo Shoots

The income from Photo Shoots is an estimate based on what we feel is realistic for the number of shoots we can do. This is also based on the 3 packages we have available:

Silver- £100 (1 Hour photo shoot with 1 outfit change)
Gold- £250 (Half Day photo shoot with 2 outfit changes)
Platinum- £500- Full Day photo shoot with unlimited outfit changes)

All of the above packages include 1 A4 Print and any additional prints can be purchased at extra cost.

The stylist is not included in the price and can be requested for a further cost of £100 half day or £200 full day- this cost has not been added to the cash flow as will be paid by the customer and then passed on to the stylist.

These prices were decided after market research was done (shown in Advertising section on blog), and as stated in the rationale we want to charge competetive but reasonable prices so our prices are considerably lower than most.

This is also because we are based in a small town where the income of people may not allow them to pay such high prices as in london; however, our location does mean that there is less competition in the local area.

The first month in the cash flow is based on the assumption that we will sell 1 Platinum package and two Gold packages. Each month thereafter shows a steady increase as the marketing takes affect and we begin to get a reputation through word of mouth.

Printing and Mixed Media Sales

This includes any printing from single prints to print books and posters. Some studios charge very large amounts for printing- this is again shown in earlier research. We will be outsourcing our printing and add on to the cost we pay so after taking this into account the printing figure is estimated with the average customer paying around £40 for 3 large A4 prints.

This also includes re-prints where customers have come back to us after a shoot wanting extra copies, the images are stored for 3 years giving us scope for further income.

Studio Rental

We also rent out the Studio to Photographers charging a day rate, as there are very few studios in the area this gives us an extra income when we arent using the studio.

Through some market research it was found that studios in London tend to be cheaper to rent than ones in the North West due to the mass availability of them. As we are based in a small town where they are not in their hundreds, studio fees can be higher.

We decided that a daily rate of £300 would be reasonable- this is cheap compared to some studios in Manchester- which will help us to get more business.

Expenditure

This list is not exhaustive- the below headings are explanations of some parts of the cash flow where i felt i needed to elaborate.

One off Start up Costs

As stated in an earlier post- this covers the initial purchase of the equipment, deposit on the studio, purchase of furniture, consumables and stationary.

Rent, Business Rates and Utilities

This figure has been estimated

Telephone & Mobile

This figure has been estimated

Salaries

This figure is based on what we feel would be a fair income for each job role, assuming that 4 of the roles would be undertaken by ourselves the wages reflect what we are comfortable to live off considering that some of us would also have a 2nd job and stay in current part time employment as well as running the business.

Stationery and Refreshments

This has been estimated based on providing the clients with refreshments such as soft drinks, tea and coffee- and assuming the staff will provide their own refreshments.

Web Site

Although we havent actually produced a web site- if this were a real business we would and Sara has given the figure of 5 per month for web hosting assuming we created our own site- which is a reasonable assumption given the skills of the team.