‘How To’ Coaching series – Activity 41

Who controls your financials?

Chapter 2 – Financial Control – Rule your money

This is part of the ‘How to’ coaching series.  An ongoing series of activities to make your business successful.  Follow it step by step and see positive results as you develop a robust business model, set on a solid foundation.

Activity 41 – I can predict my future cash flows

Where’s your crystal ball, that you can predict income, I’ve heard it said.

Well I don’t have a crystal ball, but I do have statistics, records and my trading history available on which to base my predictions.

At a very basic level, most business owners will know if there are pending transactions and upcoming sales meetings on the table.

If we expand on that, we can come up with a system that that will provide you with a pretty accurate view of future flows of the cash in your company.

The main thing is to record all the in/out transactions over time, conversion rates from prospecting to the sale, and planned marketing activity.

This will form the basis of your prediction process.

The HowTo Bit

Understand your outgoings by date over a given duration. This will help you predict the future outgoings.

List all the known and anticipated outgoings on a plan.  My plan is for the year ahead; I use a spreadsheet broken down into weeks.  This shows your outgoings by week.

Record all your expected and planned income onto the plan.

You now have a date for when you will run out of cash.

Include your credit line (overdraft & capital you would choose to invest into the business).

You now have a view of when your cash goes out/in and when you will run out of funds.

To predict the future cash flow, add a line of expected future income based on your company’s historical sales data, linked to the quantity of marketing that you are doing verses your conversion rates.

If you would like further information on how to set up your prediction tools, Contact Us

About Alex Petty

Blogger, runner, mentor
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