Industry sector: Retail and wholesale

Outdoor equipment shop: Postage, stationery, advertising

You're likely to spend a certain amount both on promoting your business and on general postage costs - sending out invoices, paying bills by cheque and so on. Enter in your cash flow forecast the amounts you will spend on:

  • postage. You are likely to spend a certain amount on a regular basis, but every now and then you might decide to do a mail shot advertising your business. This will increase the amount you spend on postage in that month
  • business stationery such as letterheads, invoices and so on. Your local printer will be able to give you an estimate of how much a package of essential business stationery costs. You will probably pay for this in month one or two and then reorder as necessary later in the year
  • miscellaneous stationery items
  • advertising. You might decide to advertise your business on a regular basis, for example in the local newspaper or business directory. You may decide to sponsor a local event, such as a slalom race at a local dry ski slope or a competition at a climbing centre. Having your own website is an excellent way of advertising your business and can be created relatively inexpensively with little in the way of updating costs if you're not using it for ecommerce

Once you have decided on your advertising strategy enter your estimate of the cost in the months in which you will spend the money.

Saving money with electronic communications

If you think your postage costs will be high you could consider switching some of your correspondence to email. You could use email to tell customers about your latest offers and to distribute electronic copies of your brochures or catalogue - or to direct customers to your website. Just be sure you have their consent and always avoid 'spamming' anyone.

Freight and courier charges

If you're going to sell online or by mail order then you'll almost certainly be spending considerable amounts each month on parcel or freight services.

You'll need to decide which carrier is the best suited to the products you sell and provides the most economical and efficient service. You could consider using several different carriers depending on what you're sending.

Unlike general business postage costs and other overheads, you'll only incur shipping charges when you make a sale. So if you think you'll sell 100 items online each month, and they'll cost you £2 an item to send, then your monthly shipping costs will be £200.

It's important to price up shipping costs before you start selling. If you're going to offer free or subsidised delivery then you'll need to know how much to build into your margins so that you make a profit. And if you intend to charge for shipping at cost price you'll need to know how much to charge.

As with your selling prices, it's often important to be competitive with shipping charges. If you're planning to charge £5 to send something make sure your competitors aren't selling the same item at the same price as you - but with free postage.


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