'Cash sales' means all income from your main business activity which is received at the time of sale. Although some customers may pay you in actual cash, remember that Cash sales also include:
- direct transfers
- debit and credit card payments (if you decide to accept them)
To prepare your cash flow, you will need to estimate how much income you will receive over the next twelve months (including VAT if appropriate). To do this you will need to work out what quantity of your eggs and/or poultry you are likely to sell and at what price.
Sales where you don't receive payment at the time of sale are known as 'Cash from debtors'. You will have to estimate what percentage of your sales will be Cash sales and what percentage will be Cash from debtors.
Once you have decided on the split between Cash sales and Cash from debtors, try to make an estimate of what the overall value of your sales will be. Think about the things that will affect this, such as:
The price that you receive for your products is one of the key factors that will affect the total overall level of your sales. Your prices will be influenced by:
- who you sell to
- the quality of your products
- your method of production (for example, organic and free range production generally attract a price premium)
- the general state of the market and the level of demand for what you intend to produce
Another main factor that will affect your sales is the volume of poultry and poultry products that you produce. Production volumes are directly influenced by the size of the flock, the yields achieved and by levels of mortality in the flock. Depending on the nature of your poultry enterprise, you'll need to:
- estimate the number of eggs laid per bird per year, whether for commercial egg production or for breeding purposes
- estimate the feed conversion ratio of your broiling fowl - that is, how well your birds convert the food you give them into weight gain
- make an estimate of what percentage of your breeding or laying flock, rearing pullets or broilers will die during the year
Once you have worked out a Cash sales figure add it to the relevant field in your cash flow forecast.