Our Cashflow Improvement Tool is available to download as an excel file here: Coast Capital Cashflow Improvement Template
The key value of this template is to estimate your cashflow for the next 12 months (Step 1), and then to discover how small changes to five key variables will improve your business Step 2).
Step 1
Cashflow estimate
Enter either your actual or future cash in (sales, money raised) and then the cash out. It doesn’t need to be 100% accurate as it’s the second step that demonstrates how you can improve your cashflow. In order to complete a sales forecast for a startup, you’ll need to:
- look at trends
- check out past statistics of market demand
- find out what your competitors are doing
- work out what you need to do to break even
If you’ve an established business, then look at:
- last year’s sales
- opportunities coming up
- any threats on the horizon
Step 2
The data from the Step 1 cashflow has carried through. The key part here is the changes that will occur to the cashflow when you adjust the five variables at the top of the Step 2 page (price, sales, expenses, direct costs and cash).
Experiment with different improvement factors to see their potential improvement on your profit. To isolate one factor at a time, leave ‘0’ in the other improvement factors. For example, a 10% increase in price should give you a better result than a 10% increase in sales (as a sales increase would include a cost of goods sold component, where a price increase goes straight to the bottom line).
Continue to experiment with these five improvement factors and then make a list of practical ways you can implement in your business to:
- increase prices
- increase sales
- reduce monthly expenses
- reduce direct costs
- increase your own cash
The Stuff We Need To Say
This content is for general information purposes only. It is not to be relied upon as financial, tax, or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. You should consult your own professional advisor for specific financial, investment, and/or tax advice tailored to your needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.
