If you’ve ever tried to get a bank loan, or prepare a business plan, you know they ask for a financial projection.
What that means is they want to know what you think you’re income and expenses for the business are going to be for the next year. The bank wants to know how likely it is that they’re going to be paid back. And in a business plan, the financial projection helps you as a business owner focus on where your income is going to come from, and what costs you’re going to incur.
But, a cash flow projection is useful anytime you’re going to make a change in your business. For instance, thinking of adding an employee? How much will that impact your income, and your costs? Will the added income offset the cost plus add some profit?
I’m all about planning to profit. You should always think ahead and make sure you cover your costs and some profit in all your business deals.
A cash flow projection can:
I think every small business owner should prepare a 12 month cash flow projection every year. Make it part of your December or January new year process. Look ahead and plan your sales, calculate your costs, and plan to profit.
Request my whitepaper below to learn how to prepare a 12 month cash flow projection.