'Cash sales' means all income from your main business activity which is received before or at the time that the services are supplied.
This would include:
- fares received from local bus service passengers
- payments, including deposits, received on or before the day of travel from private hire customers
- payments, including deposits, received on or before the day of travel for tours and excursions that you have organised
Although many of your customers will pay you in cash, remember that cash sales also include:
- debit and credit card payments (if cards are accepted)
To prepare your cash flow, you need to estimate how much income you will receive over the next 12 months. This means working out how many passengers you are likely to carry and how much you will charge them.
There are a number of things you will need to consider when you make your estimates:
Which of the following services will your business offer:
- local bus services
- private hire work
- contract work
- own-account tours and excursions
- how many vehicles will you operate
- what size will your coaches be
- will you use minibuses and people carriers
Don't forget, you will need a PSV operator's licence if your vehicles are classed as Public Service Vehicles and they carry passengers by road for payment.
- where will you be based
- will you have a depot and passenger terminus
- will you have a workshop to do your own maintenance work
- will you offer repair and maintenance services to other coach operators
- will you hire out your coaches to other operators
- will you offer refreshments to passengers
- who will be your customers
- will you target members of the public, or will you try to get contracts with local authorities and so on
- how will your customers know about you
- how will you set your fares (don't forget, you must be able to cover your costs, overheads and drawings)
- how often will you review your charges
- what will be your policy on discounts
The bus and coach sector is very competitive and local bus services are increasingly dominated by major national concerns such as Stagecoach. This can make it very hard for the independent to break into the market.
Private hire and contract work is also very competitive and most operators have to manage on tight margins, particularly as fuel has become so expensive. It would be a good idea to make sure that your business will offer something special that will attract customers to you rather than to your competitors.
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.