Cash flow is the lifeblood of your business. Without clear visibility, many small businesses run into serious financial trouble—even when sales look strong. The solution? A cash flow forecast.
Here’s how to create one in just 5 easy steps.
Step 1. Gather Your Income Data
List all expected sources of income: sales, contracts, subscriptions, or grants. Break them down by month for better accuracy.
Step 2. List All Fixed and Variable Expenses
Include rent, utilities, wages, insurance, and loan repayments. Don’t forget seasonal expenses like tax or stock purchases.
Step 3. Map Out Timing of Payments
Cash flow isn’t just about amounts—it’s about when money moves. Record when invoices are due and when you expect to pay suppliers.
Step 4. Build Your Forecast Spreadsheet
Use a simple Excel or Google Sheet with columns for each month. Deduct expenses from income to see projected cash flow.
Step 5. Monitor and Adjust Regularly
Update your forecast monthly. Compare actual vs projected results to spot gaps early and adjust accordingly.
Why a Forecast Matters for Small Businesses
A clear forecast prevents cash shortfalls, highlights funding needs, and gives peace of mind. It’s also a valuable tool for investor confidence.
Want expert help setting up your cash flow system? Book a coaching session today.
