Industry sector: Retail and wholesale

Architectural salvage: Cash sales

'Cash sales' means all income from your main business activity which you receive at the time of sale. They could include any deposits you take up-front to secure an item too. Many of your customers will pay you in cash, but remember that Cash sales can also include:

  • cheques and banker's drafts
  • online payments made through e-commerce transaction services such as PayPal - and through other online payment gateway/third party merchant account providers
  • bank transfers
  • debit and credit card payments (if you accept cards)

To prepare your cash flow, you need to estimate how much income you'll receive over the next 12 months, including VAT if appropriate. To do this you'll need to work out how many items you're likely to sell, at what price and when you will receive the money. You'll also need to decide on the services you'll offer and what you'll charge for them.

Once you've made an estimate of your income, think about how much of this would be Cash sales and how much would be 'Cash from debtors' - payments from other businesses like professional designers that you give credit terms to.

Things to consider

Keep in mind the following points when you estimate how much income your business will earn:

  • your sales will be affected not only by the number of potential customers but also by the amount of competition. Doing some market research will help you determine both the level of demand and how much competition there is
  • demand for architectural salvage can be seasonal - things are generally busiest in the spring and summer months when people spend more time and money on home improvement
  • getting the price right is crucial. Putting the right price on an item can be difficult when no two items are exactly the same - there's no substitute for experience here
  • location can be very important. You may need to be easily accessible to your potential clients - it could be advantageous to be close to a well known centre for the antiques and salvage trade like the Cotswolds and West Sussex
  • browsing for curios and unusual objects is a leisure pursuit for many people - so it may boost sales if you open at weekends and perhaps late on certain evenings
  • it's important to identify reliable sources of good quality stock
  • you'll need to make sure you stock items that are in demand - this will mean staying in close touch with the market and keeping up with fashion trends
  • you may be able to increase your sales by 'adding value' to the things you sell - even if it's just cleaning them up a bit or doing a few repairs
  • selling goods online can increase your potential customer base massively - you could reach buyers on the other side of the world!
  • projecting the right image for your business will help you maximise sales. Effective advertising and marketing can help your business to fulfil its potential
  • your reputation is very important. Building a reputation for things like high quality, helpfulness, good value and a wide range of stock will help to ensure that you get repeat business and recommendations from existing customers

Think about the size of the business. What type of outlet will it have and how many outlets will there be?

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.