Step 3 of 5

Plan your financial future

You have chosen a new business model. Now it is time to see how your finances fit with this new model. Various budgets give you insight in your financial future.

Draw up an operating budget

Once your new business model is clear, draw up an operating budget based on it. For one year, chart the impact of the sales decline of the previous period on the total profit forecast. Also outline the expected revenue from the new business model. How? Calculate the (expected) turnover per month and calculate this to a year. Take into account payback time. After all, it takes time to build up a customer base for your new business model and get it off the ground.

Draw up a liquidity budget

Next, work out a liquidity budget. In it, you make it clear to yourself how much money you have in surplus or deficit each quarter. With the Future Check, you can see how your business could be financially strong in various scenarios. Do you have the picture? Then look for ways to improve your cash flow, the difference between your income and expenditure. You can also draw up a liquidity budget on a monthly basis. Also, include new investments in your liquidity budget.

Video: Make a financial plan: investment and financial budgets

Improving your cash flow

Are you owed money by customers? Then get to work on debtor management. Invoice your customer soon after delivery, request advance payment and make it as easy as possible for your customer to pay digitally. For example via iDeal or with a payment request via your bank. With good credit management, you pay invoices to your suppliers on time, but not too early. You make a payment schedule in which you do not pay all invoices at once.

Inventory holds money that is not immediately available for your business. Reduce that amount by optimising your stock, buying smart and freeing up cash. Do you operate in retail? Think about smart purchasing in terms of products on consignment. Here you agree that you will pay your supplier only after selling the product.

Reclaim VAT on bad debts to increase your income. Do you have a provisional income tax or corporation tax assessment and expect lower profits than in other years? Then apply for a reduction in your provisional assessment.

Draw up an investment budget

In an investment budget, you list what you want to invest in and what it will cost. The transition to your new business model may involve investments in fixed assets. These are assets that will be in your company for more than a year. For example, computers, inventory and machinery. Or in current assets: assets present in your company for less than a year. Think of stocks, debtors and cash.

Solve your debts

Changing your business model does not mean that the debts associated with the old business model disappear. You need to tackle those before you approach a new financier. There are various solutions for this, such as the amicable route and the WHOA. In an amicable settlement, you make repayment agreements with creditors yourself.

Through the Homologation Private Arrangement Act (WHOA), you can reach an agreement on a debt settlement with part of the creditors under certain conditions, which can be binding for all creditors. This law helps companies that are still viable to avoid going under due to debt. It can be nice to have an adviser look at your options with you.

Getting started with debt resolution? Then use the step-by-step plan dealing with debts.

KVK Advice Team

Do you have questions about a new business model or the Business model canvas? Call the KVK Advice Team Bel 088 585 22 22.