'Cash sales' means all income from your main business activity which you receive at the time when you make a sale. This means any payments you receive from customers when they order their installation - or as soon as you finish the work. It also includes any retail sales you make - such as equipment you sell to DIY installation customers.
Some of your customers may actually pay you in cash, but remember that Cash sales can also include cheques as well as debit card and credit card payments.
To prepare your cash flow, you'll need to estimate how much income - including VAT if applicable - you will receive over the next 12 months. To do this you'll need to:
- estimate how many jobs you're likely to carry out each month
- think about what types of job they'll be - for example new satellite installations, terrestrial aerial replacements, repairs and so on - and what your average charge will be for each type of job
- decide if your business will also earn income by 'box-shifting' - selling items like satellite receivers, other parts for satellite systems, Freeview boxes, and perhaps even things like televisions to retail customers
- work out approximately what percentage of your sales will be Cash sales - goods and services paid for there and then - and what proportion, if any, will be to customers who you send an invoice to ('Cash from debtors')
When you make your estimate of how many jobs you'll carry out each month, take into account your anticipated working hours and remember to budget for holidays and illness. Also remember that not all of your time will be 'productive' (will earn you money) - you may have to set aside some time for administrative jobs, marketing activity, giving estimates and quotes, dealing with call-backs, chasing up late payments and so on. Make a realistic estimate of the number of jobs you could complete in a day, taking into account travelling time and making an allowance for things like unforeseen complications and customers who are out when you call.
Remember that it may take some time after you begin trading to establish your business and build up to your full earning potential.
Aerial and satellite installation work is largely outdoors, so you'll be working out in the weather much of the time. There may be times - particularly over the winter months - when really bad weather prevents you from working at all. Even when the weather's fine, daylight hours are much shorter during the winter so you'll probably find that you can complete fewer installations in a day.
The local market
Three very important factors that will affect your business are:
- the number of potential customers in your area
- the type of services that they're likely to require
- the amount of existing competition
Doing some market research will tell you more about your potential customers and your competitors - this will help you to identify your own place in the market.
Also think about the following points when estimating your Cash sales:
- how big an area will you serve? The bigger the area, the more potential customers you'll have - but the further you'll have to travel
- how densely populated is the area where you intend to work? You may find you have to travel further from job to job in rural areas, increasing your costs and reducing the number of jobs you can do in a day
- where will your work come from? Think about your advertising and marketing strategy, and whether you'll aim to get sub-contract work from other aerial businesses
- your reputation is very important. Building a reputation for quality, honesty and reliability among your customers will help to ensure that you get repeat business and recommendations
- projecting the right image for your business will help you to maximise sales. You could, for example, look into joining a reputable trade association like the Confederation of Aerial Industries (CAI) or the Registered Digital Institute (RDI), becoming a Sky Local Expert (sometimes referred to as an Authorised Sky Agent) and so on
- getting your prices right is important. You'll probably need to keep an eye on what your competitors charge for similar services
- trade customers such as building contractors and housing developers may check that you and your employees hold Construction Skills Certification Scheme (CSCS) cards before they use your services
To help with your decisions, click on the checkpoints for guidance. Once you have worked out a Cash sales figure add it to the relevant field in your cash flow forecast.