You’ve built your business from the ground up, and you’ve mastered so many areas already – choosing which products and services to offer, creating your website and social media profiles, getting your SEO sorted, starting your email list and writing your sales sequences. You’ve started seeing sales flow in and have some happy customers – you’re on a roll!
Now it’s time to get savvy with your business strategy and add Cash Flow Forecasting to your business model
Cash flow forecasting is a little like having a financial crystal ball for your business. It allows you to predict the money coming in and going out of your business over a set period, like a month, quarter, or year. For successful business owners, It’s not just a nice-to-have; it’s a must-have. Here’s why:
It helps you dodge financial land mines.
You’ve just landed a dream client, you’re excited, and you make plans to scale. Then a huge expense comes out of nowhere! Maybe it’s an unexpected tax bill or a crucial piece of equipment breaking down. Had you been forecasting your cash flow, you’d be ready to handle it, panic free.
Opportunity Doesn’t Wait.
Let’s an opportunity to buy inventory at a rock-bottom price comes your way. You’d kick yourself if you had to pass it up because your cash flow wasn’t in a place to support that decision, but if you’ve forecasting, you’ll know exactly how much wiggle room you have in your budget to grab those items at a steal!
Make Friends with Your Bank Account.
Constantly (and nervously) checking your bank balances is no way to live. With a solid cash flow forecast, you’ll know what’s coming and going, and it’ll help you sleep better at night. Total peace of mind.
Keep More of What You Make.
You’re likely running your business with a lean mindset already, but there’s always room to maximise what you keep. Forecasting can point out the holes in your business bucket, those seemingly small expenditures that add up over time. You can then reassign that money to something that’s going to make your business thrive.
How to Forecast Like a Pro.
Ready to start cash flow forecasting? Here’s the simple way to get started:
1. Start with What You Know: Record all your fixed costs like rent, utilities, and salaries. These are your non-negotiables.
2. Estimate the Variables: These are expenses that can change from month to month, like supplies or freelancers.
3. Predict Your Income: Take a look at your past income to gauge future earnings. Be realistic and optimistic!
4. Know your numbers: Subtract your outgoings from your income to get a clear picture of where you stand.
5. Revise Regularly: Your numbers will change as your business grows. Make it a habit to revisit and revise your forecasts on a regular basis – and calendar it so you don’t forget!
Think of cash flow forecasting as your business’s GPS. It’s not going to eliminate all obstacles, but it’s going to make the ride a whole lot smoother.
If you’d like personal help to have more cashflow with profit, get in touch and we’ll work together to make it happen.
Happy forecasting!