1. JCF Associates Dr Christine Fiddler, PhD John Fiddler MBA 2014

2.  Start up or existing  Elements of running a business JCF Associates 20142 Finance Marketing and Sales Operations Growth and development

3.  What do YOU need to live on?  Will your business make money straight away?  Do you have financial reserves?  Options Work out your personal survival budget... JCF Associates 20143

4.  Forecast Income  Sales revenue  Variable costs  Fixed costs JCF Associates 20144

5.  Break even (product) = Total fixed costs Sales revenue (per unit) – variable costs (per unit)  Break even (annual) = Overheads Sales x 100  Annual GP % = Overheads GP % x 100 JCF Associates 20145

6.  Cost plus pricing  Cost of producing product or service plus amount you need to make as profit  Ignores your image or marketing positioning  Hidden costs easily missed so true profit per sale often lower than you realise JCF Associates 20146

7.  Value – based pricing  Price you believe customers are willing to pay, based on benefits you prove you can provide  Perceived value to your customers  Very profitable, but can alienate customers driven by price JCF Associates 20147

8. Cost plus pricing: product Jewellery maker thinks she can sell 1500 units over 12 months... Her research shows: Direct cost per unit £1.76 2640 Overheads 1500 Personal survival budget 20000 Breakeven revenue = 25140 25140/1500 = £16.76 per unit as a minimum Breakeven is a starting point – further research may lead to charging a higher price JCF Associates 20148

9. Cost plus pricing: Service A handyman will work 30 hours per week but 5 hours will be spent doing admin etc. He will take 6 weeks holiday per year... 46 weeks x 25 chargeable hours = 1150 hours per year (no significant direct costs) Overheads 2800 Personal survival budget 20000 Breakeven revenue = 22800 22800/1500 = £19.82 minimum charge per hour Breakeven is a starting point – further research may lead to charging a higher price – for example his competitors charge £25 per hour JCF Associates 20149

10.  Base your price on what a customer is willing to pay...  Keep in mind what you need to live on  Keep in mind the cost to produce  If your price does not make you money or at least cover your breakeven – ask yourself is it worth it? JCF Associates 201410

11.  Most common cause of business failure is running out of cash  Even profitable businesses can’t get by when cash dries up  Proper planning  Profitability v day to day cash JCF Associates 201411

12.  Business plan  Blue print for success  Referral document – focus, goals  Update it regularly  Helpful and needed if looking for finance  Business plan formats What are the key things that should go into a business plan? JCF Associates 201412

13.  Everyone needs help now and again  Setting up and running your business  Growing your business  Research has shown that a business that gets the right advice is more likely to make a go of it and more likely to be more successful (Profiting from support update, Barclays Bank, Dec 2005) JCF Associates 201413

14.  JCF Associates  Johnfiddler@jcfassociates.co.uk Johnfiddler@jcfassociates.co.uk  christinefiddler@jcfassociates.co.uk christinefiddler@jcfassociates.co.uk  www.jcfassociates.co.uk www.jcfassociates.co.uk  Twitter: @FinanceCoach1  Facebook: TheFinanceCoach JCF Associates 201414