Most business owners get a bit worried when the subject of cashflow forecasting comes up.
They all need to do it, they all know they should be doing it, but very rarely does anyone have this fundamental item prepared and at hand!
Why……. well, I believe that there are a number of reasons for this……..
- It just feels like hard work to produce and time can be better spent elsewhere,
- they don’t really believe that it will tell them anything they don’t already know and
- they don’t fully understand it or have the the skills to pull it together
Yes, it can be hard work to get a clear understanding of what the cashflow of the business looks like and it does take time initially, but ask yourself this question “If you make no more sales – ever – at what point in the future will your business run out of money?” . If your answer is….. ‘I DON’T KNOW’ then now is the time for you to get busy and produce a forecast.
Using the knowledge that you already have of your business’ performance will help you build up a picture of where your business will be in the future. You can use this information to help you make better decisions and stay ahead of any future cashflow challenges.
The beauty is that you already have everything you need to get this done – it’s just a matter of writing it all down and keeping it topped up with new data – simple right?
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