Financial Aspects

We can supply a sample spread sheet showing the cash flow forecast of a fictitious 4-pool float centre. This spread sheet takes into account almost all of the expenses you will incur over a two- year period. We have purposely only indicated a 50% occupancy of the float pools to show that even at that rate the float centre is a very viable business. Many of our customers now run with utilisation of 80% or 90%, with 100% during weekends.

Perhaps the most important item in the budget is marketing, including publicity. It is a mistake to open any business without a marketing budget; this budget can be low cost if you invest a lot of your own time, but if you are running the centre yourself, you will need to spend money on promotion. It is also a mistake to start a centre assuming that you (or the manager) will not need a salary (which may be true if your financial situation is strong to begin with), but you will not be able to run the centre by yourself 12 to 14 hours a day seven days a week, so you will need staff and they must be paid.

You will also appreciate that marketing a one-pool centre costs exactly the same as marketing a four-pool centre, which is another reason to carefully consider the number of pools.

If you do not have sufficient funds to cover all the costs, the best way to get financing is via a lease-finance company; many of our clients have used this method. If you are in the UK, we can recommend lease-finance companies which have helped a number of our clients. Please let us know if you would like any information on this; Floataway holds an Office of Fair Trading standard licence to advise on finance. If you are not located in the UK, then you must get lease finance locally through your bank or a local lease finance house. There are many of them available in every country.

The basic advantages of lease finance are:

• Each payment is fully deductible for both value-added tax and

  corporation tax

• The cost is spread over several years so that your working capital is

  freed in the vital early stages for marketing and other expenses which

  cannot be covered by a lease.

• An advantage to consider over borrowing the money from a bank is that

  a lease is based on the assets you lease whereas a bank loan will always require collateral such as your house.

  Of course, your leased assets are at risk if you do not keep up your payments.

  Typically lease finance will cost you approximately £100-£150 per week per float pool (depending on the product) over three years (subject to status).