How do I develop a cash flow statement for my business plan?
The cash flow statement for the business plan includes the total planned costs (all the costs of starting or expanding the business and how the costs will be funded.) These costs should be quoted in writing to make the financial plan as accurate as possible. This is the opening report of the cash flow forecast.
Developing the CASH FLOW statement… some basic expressions
Cash: It’s you, the business owner as cash equity, other sources of financing (eg bank loans), or other financing/equity providers (eg Saskatchewan Indian Equity Foundation (SIEF), Clarence Campo Development Fund (CCDF))) and the National Research Council Industrial Research Assistance Program (NRC-IRAP).
In my experience, the hardest part of the financial job for a client is determining the cash flow statement for the first year. A cash flow statement can be used to define the short-term viability of a business, its ability to pay its bills. A sales forecast is the amount of revenue a company expects to earn some time in the future within a specific period. It is an estimate of the business’s sales broken down by month to arrive at the business’s annual sales. Each row in the sales forecast is a revenue stream.
Cashing out: Cash outlay for all expenses for starting or expanding a business, directly from projected total expenses, opening statement. Next, determine the monthly cost forecast.
Since each business may be slightly different, it is difficult to list all possible expenses. Some of the key expenses that should be listed on the cash flow statement each month include:
– Accounting/Bookkeeping, Insurance, Loan Payments, Marketing/Promotions/Social Media, Office Expenses, Rent/Lease Payments, Repairs, and Maintenance, Operating Costs such as Telephone/Utilities, Administrative Salaries and/or Employee Wages and Benefits, Meals and entertainment and travel.
Essentially, the cash flow statement is concerned with the inflow and outflow of cash from the business. The financial plan of the business plan should include a 3-year cash flow forecast, profit and loss statement and balance sheet as the financial institution or financing plan will include these as part of the business plan.
Accounting/Bookkeeping, Insurance, Loan Payments, Marketing/Promotions/Social Media, Office Expenses, Rent/Lease Payments, Repairs, and Maintenance, Operating Costs such as Telephone/Utilities, Administrative Salaries and/or Employee Wages and Benefits, Meals and entertainment and travel.
Essentially, the cash flow statement is concerned with the inflow and outflow of cash from the business. The financial plan of the business plan should include a 3-year cash flow forecast, profit and loss statement and balance sheet as the financial institution or financing plan will include these as part of the business plan.
Tip
– The estimate or quote will ensure the accuracy of the total project cost.
– The research done in the written part of your business plan will be linked to your financial plan
– The cash flow statement is just the next step, just put the estimated numbers into the format…cash in and cash out.
For additional information on business plans and financial projections, please email Dana at OK Consulting.
