You have a great business started or about to start, your branding is on point, you’re growing your social media and posting lots of content… BUT.. you have been neglecting the not-so-sexy behind the scenes step of tracking your finances. Sound familiar?

This is your wake-up call my friends! Your cash flow will make or break your business! Let me preach the scary stat that all numbers-based peeps in business love to preach. The most common reason new businesses fail is due to cash flow related issues. According to, 82% of businesses fail because of cash flow issues.

It’s the number one reason cited by business owners as to why they did not succeed. As such, if you can’t tell me how much a month you spend or plan to spend you need to start forecasting your cash flow! For so many entrepreneurs, cash flow issues can be mitigated by having a cash flow forecast that shows the flow of incoming/outgoing cash expected.

What is a Cash Flow Forecast

A cash flow forecast is like a budget that you’d use for a personal project like renovations or a wedding, but it is a live document of your business that forecasts what your future sales and costs are expected to be. Your cash flow forecast will show you how much cash you will have on hand or if you will be short of cash.

5 Benefits of Having a Cash Flow Forecast

There are plenty of benefits to having a cash flow forecast. It is an essential ingredient to any successful business. Here are 5 key benefits that come to mind:

  1. You can see a breakdown by category of where you are spending money, which will help determine if you are overspending in areas. This will help you cut back on your costs (expenses).
  2. A cash flow forecast will help you plan! You will see which months you need to hold back on expenses such as work-related entertainment in order to meet your expenses.
  3. You can measure your success. If you just take each week as it goes without planning your costs, how can you really see your growth? The cash flow forecast will show if you over or underperforming, you can compare your actual sales to what you forecasted. Over time, you will get better at understanding the fluctuations and your overall forecasting.
  4. If you ever seek a bank loan, borrowings of any kind, or wish to seek equity investment you will need to show that you are on top of your financials. Having financial documents on hand that show you have been making projections and monitoring your cash flow is essential if you want to raise capital or borrow money.
  5. You can make business decisions for a product you are offering that isn’t performing as well as you might think. Just because you have sold a tonne of a certain product, doesn’t mean that they are financially feasible. The costs to get those products to market or time dedicated to services may outweigh the return. Monitoring your cash flow will help you identify your best-performing products.

You Just Have to Start

Like SO many things, taking the first steps are the hardest. You may be cringing about all of the receipts you have been accumulating and thinking you will never have time for those. For now, that’s OKAY… We aren’t going to make you put together all of your spendings to date, you are going to start by focusing on your projections – your upcoming cash.

To some readers, I know the words ‘finance’, ‘cash flow’, ‘bookkeeping’ or anything related just makes your head spin and you want to close your browser, but HANG IN THERE. You want to have a successful business you ABSOLUTELY HAVE to understand your finances. And HECK, it’s friggin awesome once you can rattle off your burn rate and know your costs. It’s really that not hard, it’s just starting to get into the habit of monitoring your cash flow. You can start tracking your cash flow and even if you do outsource recording your cash spend, you ultimately need to understand it to succeed in your business.

How to Create a Cashflow Forecast

Fail to plan and plan to fail, that doesn’t just apply to planning the perfect email campaign or planning a new product launch. Your finances are the bread and butter of any business. Ultimately, if you don’t understand the financial aspect of your business especially the flow of cash, you are planning to fail.

I have created a template you can complete, you can have these emailed to you below.

Some other ways of tracking cash flow for entrepreneurs and small business:

  • Excel
  • Numbers
  • Google Drive Sheets (what I use)
  • Accounting software – HIGHLY recommend you sign-up for online accounting software that is intuitive and easy to use so it takes the stress off your shoulders. I use (and love), Freshbooks for tracking my finances

You want to use one of the above programs because they will add your numbers together for you. If you handwrite your numbers or use a word document, your totals won’t automatically update with any changes.