Definitive Business Plan, Second Edition, The

Operating expenditure

After the complexities of dealing with capital spending, operating expenditure is delightfully simple. There are occasional timing difficulties – but these are easy to deal with as already discussed under accruals and prepayments above (see Chapter 7 ). The following commentary covers both production costs (part of the cost of sales) and operating cost (costs not directly attributable to the cost of sales), because they are both treated identically from an accounting and forecasting point of view.

When looking back at your past performance, all you have to do is copy out the numbers. When looking forward, it is really just a matter of making forecasts for each time period and entering the amounts in your spreadsheet. If ...