CALL US TODAY! 602-989-1592

Cash Flow Projections…. A Must

Many small business do a budget of sorts for their first year in business. In most cases they are optimistic projections of what could happen and seldom include the owners salary, ( among other items that are left out).

In most small businesses there are a few, regular,  fixed expense, rent, telephone and perhaps a loan payment  for the start up capital.The forgotten expenses are irregular expenses such as insurance premiums,  membership fees, etc. Another uncertain expense is the cost of goods as that is directly related to you sales volume.

Where most small business owners fall short is on the income projection. While you don’t have a crystal ball to tell you your weekly sales volume, you should base your projections on real market research. Once you have researched this area, then do a cash flow estimate if your sales are 10 to 20 percent under what you project.

Cash flow projections should be done monthly. The previous month will help determine a pattern. While you do a monthly cash flow projections, it should be for the next 12 months and changed as needed each month.

This will allow you to watch you expenses based on you “real” projections and also will help you determine the effectiveness of your marketing.  Yes, it is time consuming, but without this foundation your chances for success grow much smaller.

__________________________________________________________________________

Keeping up is always easier than catching up!

Have a great day!

Leave a Comment





* Copy This Password *

* Type Or Paste Password Here *