Forecasting made as easy as 1, 2, 3

Forecasting. Just the word can make business owners slightly nervous. But the good news is it doesn’t have to be daunting.  In fact, it could be as straightforward as 1, 2, 3…

  • 1 handy template to make life easier and help you get
  • 2% more profit*, from
  • 3% better forecasting*

* AMR Research

In this post we’ve condensed down some of the main reasons to forecast, and some easy pointers to help make it easier to do. We’ve even created a simple forecast tool to make life easier and help you get started. It’ll do all the calculations for you, and let you see at a glance how your business is doing.

main CTA

Then just follow these three steps:

1. Fill out the Expenses Forecast tab to record all of your business outgoings

2. Complete the Sales Forecast tab to help calculate your sales growth

3. View your forecast in the Summary tab – it will help you visualise what’s going on and monitor your figures over time

Why it pays to forecast

From keeping an eye on cashflow, to planning ahead for the future, effective forecasting can make all the difference to your business. But when you’re busy day to day, forecasting can all too easily slip down the To Do list.

However, it could just be one of the most important things you do for your business. Here‘s why accurate forecasting is a very good idea:

  • You’ll know what’s going on with your cashflow, sales and revenue, giving you a clearer picture of your business and increased peace of mind
  • You can set more accurate budgets and targets
  • You’ll uncover new cost savings
  • You can make better informed decisions – about everything from staff and space to your marketing and sales strategy
  • You’re more likely to access finance – as investors will be more confident if you’re planning ahead

What do you want to know_

Business forecasting is so much more effective if you have a clear idea of what you’re trying to find out.

  • Who is your ideal customer, how many of them can you reach? How often will they buy from you?
  • Don’t forget the rule of thumb: 80% of your business comes from 20% of your customers
  • What are your plans for expansion?
  • What are the market conditions?
  • What’s your position amongst competition? Estimate your market share.
  • Are you affected by seasonal trends?
  • What’s the average price of a single purchase?

Expenses are a good place to start

Many people find that forecasting their business expenses is a straightforward place to start. Don’t forget these simple rules:

Fixed costs stay the same every month

Variable costs fluctuate according to sales volume

Sales are also a very useful thing to forecast, helping you make important decisions about your business’ future.

  • Look at historic data and make logical assumptions about the future
  • Don’t get overwhelmed – start with a 2-year plan and build from there

Projected sales: a handy formula

Here’s how you can quickly calculate conservative, expected and optimistic projections:

Number of customers X average sales price X number of yearly purchases

= yearly projected sales

 

With so many great reasons to start forecasting, plus our free tool to make it easy, there’s nothing to stop you. Start forecasting now and the outlook for your business could be bright!

Like what you’ve read? Why not join us on twitter @npowerbusiness #energytogrow and LinkedIn at npower Business

Forecasting made as easy as 1, 2, 3

Forecasting. Just the word can make business owners slightly nervous. But the good news is it doesn’t have to be daunting.  In fact, it could be as straightforward as 1, 2, 3…

  • 1 handy template to make life easier and help you get
  • 2% more profit*, from
  • 3% better forecasting*

* AMR Research

In this post we’ve condensed down some of the main reasons to forecast, and some easy pointers to help make it easier to do. We’ve even created a simple forecast tool to make life easier and help you get started. It’ll do all the calculations for you, and let you see at a glance how your business is doing.

main CTA

Then just follow these three steps:

1. Fill out the Expenses Forecast tab to record all of your business outgoings

2. Complete the Sales Forecast tab to help calculate your sales growth

3. View your forecast in the Summary tab – it will help you visualise what’s going on and monitor your figures over time

Why it pays to forecast

From keeping an eye on cashflow, to planning ahead for the future, effective forecasting can make all the difference to your business. But when you’re busy day to day, forecasting can all too easily slip down the To Do list.

However, it could just be one of the most important things you do for your business. Here‘s why accurate forecasting is a very good idea:

  • You’ll know what’s going on with your cashflow, sales and revenue, giving you a clearer picture of your business and increased peace of mind
  • You can set more accurate budgets and targets
  • You’ll uncover new cost savings
  • You can make better informed decisions – about everything from staff and space to your marketing and sales strategy
  • You’re more likely to access finance – as investors will be more confident if you’re planning ahead

What do you want to know_

Business forecasting is so much more effective if you have a clear idea of what you’re trying to find out.

  • Who is your ideal customer, how many of them can you reach? How often will they buy from you?
  • Don’t forget the rule of thumb: 80% of your business comes from 20% of your customers
  • What are your plans for expansion?
  • What are the market conditions?
  • What’s your position amongst competition? Estimate your market share.
  • Are you affected by seasonal trends?
  • What’s the average price of a single purchase?

Expenses are a good place to start

Many people find that forecasting their business expenses is a straightforward place to start. Don’t forget these simple rules:

Fixed costs stay the same every month

Variable costs fluctuate according to sales volume

Sales are also a very useful thing to forecast, helping you make important decisions about your business’ future.

  • Look at historic data and make logical assumptions about the future
  • Don’t get overwhelmed – start with a 2-year plan and build from there

Projected sales: a handy formula

Here’s how you can quickly calculate conservative, expected and optimistic projections:

Number of customers X average sales price X number of yearly purchases

= yearly projected sales

 

With so many great reasons to start forecasting, plus our free tool to make it easy, there’s nothing to stop you. Start forecasting now and the outlook for your business could be bright!

Like what you’ve read? Why not join us on twitter @npowerbusiness #energytogrow and LinkedIn at npower Business

The survival skills Britain’s SMEs need in 2017

Almost one in five of Britain’s SMEs are missing payday in battle to stay in business

  • 17% of British small and medium-sized enterprises have missed a payday
  • Business leaders are self-financing with 19% of SMEs relying on personal savings for financial support
  • Reassuringly, businesses have a positive outlook with over a third (36%) of SMEs more confident about their growth prospects for 2017 (compared with last year)

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LONDON, 28th March 2017: British businesses are feeling the pinch with nearly a fifth (17%) missing payday[1] in order to survive.

Despite being responsible for nearly half of Britain’s economic activity[2], research commissioned by npower Business has shown the shocking extent to which SMEs are struggling to keep their head above water.

In an increasingly competitive and complex economic landscape, SMEs businesses were found to be predominately self-financing with over half (57%) of businesses claiming they don’t rely on anyone or anything for financial support these days. Less than one in five (19%) also rely heavily on personal savings.

As with the Brexit vote, which split the country, business are also split in their confidence for growth over the coming year. Over a third (36%) of SMEs are more confident about their business growth prospects for 2017, compared with last year, mainly due to the economic outlook for Britain and the decision to leave the EU. However, a quarter (25%) of the respondents are less confident about their business growth prospects for 2017, with 67% of these attributing this to Brexit.

SMEs account for more than 99% of private sector businesses in the United Kingdom and provide employment for 16.8 million people[3].Their economic contribution should not be underestimated and that’s why npower Business has partnered with Tim Campbell, winner of the first series of BBC’s The Apprentice, to highlight the importance of these businesses, and the necessity for increased support from each other, larger businesses and Government.

Richard Longbottom, Acting Head of npower Business, said: “SMEs are super powering towns and cities across Britain, helping to determine the success and character of regions across the UK. However, it’s clear from our research that some of these businesses are relying entirely on themselves to succeed. At npower Business, we believe SMEs could do more to learn from each other in the same way that we continually learn from those who we talk to everyday. This is why we are calling on SMEs to share their superpowers and learn from each other to help improve their bottom line.”

Businessman and Apprentice winner Tim Campbell, who is fronting the campaign said: “SMEs are absolutely fundamental to Britain’s economy. Not only do they inject a substantial amount of money into the economy, they create significant jobs throughout Britain.

“Throughout my career, I have witnessed a number of remarkable ways in which SMEs have overcome problematic issues before going on to flourish and prosper. Their capabilities should be recognised and celebrated.”

Follow the conversation on twitter @npowerbusiness using the #BusinessSuperpowers

Find us on Linkedin or on http://www.npower.com/business/

 

About the research

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 1088 SME Senior Decision Makers. Fieldwork was undertaken between 13th– 21st February 2017. The survey was carried out online. The figures have been weighted and are representative of SME business sizes.

 

About npower Business

npower Business is one of the leading energy suppliers to the UK business market, serving gas and electricity to more than 195,000 small-to-medium sized businesses (SMEs).  Dedicated to helping UK SMEs, by helping our customers better understand and manage energy, we help them to reduce their energy costs and in turn improve their bottom line. We’re in touch with more than 1000 SMEs and through them, we hear what business owners want from their energy company and the issues they face when running a business.

npower Business is part of npower Group.

About Tim Campbell

Tim Campbell first became known to the British public after being hired by Lord Alan Sugar in the first series of the BBC’s The Apprentice. Since then Tim Campbell, who was awarded the MBE for Enterprise Culture in the 2012 New Year’s Honours List, has gone on to found businesses, speak favour business to global audiences and start the charitable organisation called the Bright Ideas Trust. Bright Ideas Trust has supported over 250 innovative start- ups all started by 16-30 year olds in London.  Whether it be creating wealth and employment or changing the world, Tim believes that business, in the right hands, is the catalyst of modern positive change.

Contact details:

npower press office

0845 070 2807

press.office@npower.com

 

Golin – Dafydd Wyn

020 7067 0865

Dwyn@golin.com

 

[1] Missing payday is defined here as not paying employees or the business owner not paying themselves

[2] Capital Economics, Prospects for SME growth in the United Kingdom: An assessment of the economic performance and outlook for the SME sector in cities and regions across the United Kingdom, September 2016

[3] IBID

Like what you’ve read? Why not join us on twitter @npowerbusiness #energytogrow and Linkedin at npower Business

The ABC of coping with energy debt

Electricity and gas are crucial to the day to day running of most small businesses. Get into serious energy debt, and you risk being cut off.

With npower’s energy debt ABC, it’s easy to avoid this stressful situation and keep your business running:A. Acknowledge the problem

Maybe you’ve missed a few payments or ignored some letters.  Don’t panic, just get your head out of the sand.

The first thing to do is look at your cashflow. Have you got delays on money coming in? Could you cut down on your outgoings?

If you don’t already have a money management system, there are lots of free online accounting and tracking tools that will help you analyse your spending.

B. Bring in the expertsNow you know what’s causing the problem, get in touch with your energy provider and explain the situation. If you’re an npower Business customer, speak to our dedicated team of advisors who are experienced in helping customers with energy debt. They will work with you to create an achievable payment plan, and help you make progress with tackling the problem.

Stop non-essential spending and get in contact with your late payers. You’ll find lots of free letter templates for chasing late payments online.

C. Control your cashflowOnce you’ve got a plan in place and you’ve tightened up on your spending, you need to stay in control.

Set aside a bit of time every week to look at your income and outgoings, including any direct debits.  If you don’t already manage your npower account online, that can help you keep on top of your energy payments. npower will never adjust your direct debit without telling you in advance, so you’ll know exactly what your energy cost is.

For more advice on managing business finances, take a look at our article: Master your business cashflow.

Struggling to pay for your energy? There are organisations that can help you. Both Business Debtline and Step Change provide free, impartial and confidential advice on debt and cash-flow issues for small businesses and the self-employed. Get in touch via their websites or give them a call. You’ll be glad you did.

Business Debtline: 0800 197 6026
www.businessdebtline.org

Step Change: 0800 138 1111
www.stepchange.org

Like what you’ve read? Why not join us on twitter @npowerbusiness #energytogrow and Linkedin at npower Business

Beyond the bank – our guide to alternative finance

Since the banking crisis of 2008, alternative lending options have increased in availability and popularity, particularly among small business owners. We answer some of the key questions around alternative finance, so you can decide whether it’s right for you.

What is alternative finance?

The term applies to any finance that doesn’t come from a mainstream lender, such as a high street bank. There are a number of different types of alternative finance, including:

  • Term loans – The most common type of business loan – the lender and business agree to an amount, an interest rate and a timeframe.
  • Invoice finance – A way to unlock the cash in your invoices – the lender buys your unpaid invoices so you get the money immediately. Once your customer pays, you get the remaining balance minus the lender’s fee.
  • Asset finance – There are two types. One is funding secured against assets, such as property. The other includes products like equipment leasing or hire purchase, ideal for businesses that rely on machinery and vehicles.
  • Crowdfunding or peer-to-peer lending – Here online platforms (such as Kickstarter or RebuildingSociety) connect businesses with individuals willing to invest. The business owner gets a cash injection and the investors get a diverse portfolio.

Why should you consider alternative finance?

Mainstream banks often have strict loan criteria that small businesses are unable to fulfil. And many are unwilling to lend to small businesses after the financial crisis of 2008. According to a recent report, 52% of SMEs find the availability of bank finance either poor or very poor (source). It’s no wonder so many are turning to alternative lending options.

Hear from Sally, who used peer-to-peer lending to fund her business:


Alternative finance used to be difficult to find. But in recent years it’s exploded, with loads of options and providers for you to choose from. In 2013, around £193 million was offered to businesses via peer-to-peer lending (source).

So you can shop around and find the finance that works best for you and your business.

Like what you’ve read? Join us on twitter @npowerbusiness #energytogrow
or Linkedin at npower Business

The art of negotiation

As our recent research shows, when it comes to running a small business the ability to negotiate is vital. In fact, we’d go as far as to say that being able to negotiate is critical when it comes to surviving – and growing – in the business world.

If your – or your teams’ – negotiation skills need a bit of a boost, here are a few tricks and tactics to try:

Know your bottom line

Knowing your ideal outcome before you start negotiating is key. That way, you know when to push forward, and when to stop.


Build confidence

Team building exercises, or speaking in public, are great ways to build confidence. The key is to make it fun. Playing games like Powerpoint Karaoke can take the pressure off and help teams bond.


Learn to listen

The key to negotiation is a clear understanding of what your counterpart is looking for. And to do that, you need to draw on your listening skills. Follow the 80-20 rule – listen for 80% of the time, talk for 20%.


Get clued up

Before you embark on the negotiation process, arm yourself with as much information as possible. That way you’ll feel in control and able to make key decisions in the moment.


Don’t be rude

Confidence is great. But arrogance is not. Go in all guns blazing and you’re unlikely get the result you want. Be fair and polite, or there’s a good chance your counterpart will just walk away.

 

Good luck – let us know about your negotiation successes!

Like what you’ve read? Join us on twitter @npowerbusiness #energytogrow

or Linkedin at npower Business