If you find you need to borrow money, it is important to calculate the right amount. Too much would cost you more than you need to pay and too little may mean you need to return to the lender at a later date.

You can estimate what you will need by preparing a cashflow forecast. This, as the name suggests helps you to see the actual movement of money into and out of your bank account. If you need to borrow money, you must be certain that your business is going to generate enough cash to repay the borrowing within the agreed period and the lender must also feel assured of this.

Your financial forecast will enable you to work out how your income and your expenditure will compare month by month for the year ahead. You can then plan your business with confidence and get off to the right start, happy that you have not taken on too much of left yourself with insufficient cash.