You will need income and spending projections and cash flow projections for at least three years. Projections are always guesstimates but should be based on real figures as much as possible. These might include historic costs from the Local Authority or previous operator, your own historic costs, estimates and quotes, figures from the accounts of similar size and type businesses and facilities.
There are a few other important points:
Don’t get caught by ‘optimism bias’ – assume income will be worse and costs higher then you hope
Remember to build in inflationary uplifts
Always include contingency cost lines, a sinking fund and funds for essential repairs and maintenance
Don’t forget additional staffing costs like training, redundancy and HR advice.
Definition of costs
Capital costs: are the costs which relate to the structure, site and equipment. Capital costs will also include all the professional costs related to a building project such as the architect’s fees.
Revenue costs: are the ongoing costs of running your facility including staffing, utilities, marketing and minor repairs.
Common business income streams
Income sources can be very varied and range from donations to sales of goods and services. Here are some of the most common types of business income streams and products and services for community businesses:
Membership fees and charges
Grants and donations
Public sector contracts
Personal social care budgets
Training, apprenticeships and alternative education
Corporate team building
Sale of merchandise
Potential capital costs and investment sources for a building project
Site investigations, survey costs, (e.g. noise, traffic, environmental), planning fees, building regulation fees, legal fees
Ground works, construction, finishes, furniture, fittings & equipment, external works
Professional fees: Architect, Structural Engineer, Mechanical & Electrical Engineer, Quantity Surveyor, Project Manager, Building Surveyor, CDM Coordinator
Purchase costs and Stamp Duty Land Tax, (there is relief for registered charities)
Renewable energy installations & other green features
Sinking Fund (reserve fund for future work)
Potential start-up costs & investment for a new community organisation/business
Professional fees, e.g.
Legal costs of incorporation
Office/building/land rental or land/asset purchase costs and Stamp Duty Land Tax (there is relief for registered charities)
Equipment for office or activities
Six months running costs
Equity/ community shares
Potential revenue costs and income for a community organisation
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