This week, we’ve been discussing CASH. On Tuesday, I revealed 2 mistakes that I’ve made in my business in terms of cash flow decisions. Yesterday, I gave 6 tips on creating healthy cash flow in your business. Today, we are going to create a cash flow strategy. Cash flow strategy sounds more intense than it actually is.
The Simple Math to Cash Flow
Just like you create a sales plan and an expense budget, you should have a cash flow projection. This should be your guide for the ins and out of cash. And, it’s a pretty simple projection:
CASH INFLOW – CASH OUTFLOW = CASH BALANCE
Your cash inflow will come from your sales plan. Your cash outflow will come from your expense budget (plus any inventory purchases, debt repayment and asset investments you want to make).
I recommend planning out your cash for the upcoming 12 months. Given the seasonality of the wedding business, it’s good to project how slower sales in a given period of time affects cash flow. This is an easy sheet to set up: cash in, cash out… over 12 months.
For cash inflow, you’ll want to guesstimate your sales (create a sales plan for this)… and time out the flow of your contracts. For cash flow, you’ll want to take into consideration not only your expenses, but also your inventory purchases, debt payments, and asset acquisitions.
Cash Flow Spreadsheet Download
Sound a little crazy to put together yourself? We have this available in a download here. The download gives you a spreadsheet with 12 months and categories enabling you to fill in your cash flow plans. It also has an example from a fictitious business for you to understand how the worksheet works and give you ideas of what to consider.
Interested in more downloads for your business? Check out all of our business downloads.