Cash flow projections for a business plan


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Cash flow projections for a business plan

  1. 1. How to prepare cash flow projection in a business plan<br /> – Call +1-800-351-0557<br /><br />
  2. 2. The integral part of any business plan’s financial projection section is cash flow, which describes how cash flows in and out of your business. <br />Creating a cash flow projection is one of the most complicated tasks as compared to other financial statements. <br />Cash flows must be accurately projected; otherwise, it will affect your business’ future.<br /><br />
  3. 3.<br />Cash flow is an essential statement for potential investors and lenders. <br />It helps potential investors in determining whether an entrepreneur is capable enough to run a business successfully or not and also to determine the good credit risk of a business<br />
  4. 4. STEPS OF CASH FLOW PROJECTION<br />PREPARE THE OPENING BALANCES<br />Determine the opening balances by obtaining your latest bank balance, account receivable, and accounts payable balance, if your business is already in operation. <br />If your business is new, show the current capital you have and the estimated capital you think you will get from investors and lenders.<br /><br />
  5. 5. STEPS OF CASH FLOW PROJECTION<br />ESTIMATE SALES<br />Knowing how to forecast your sales is the key factor in preparing a cash flow projection. <br />While forecasting your sales, make sure that it is realistic and relevant. <br />Your estimated sales must be as fine-tuned as possible.<br /><br />
  6. 6. DETERMINE THE TIMING OF CASH COLLECTIONS <br />Timing of sales is one of the most important parts for any investors seeking funds. <br />An investor invests in business in order to get high return on investment, in time. <br />Address the timing of cash collection of your sales.<br />STEPS OF CASH FLOW PROJECTION<br /><br />
  7. 7. STEPS OF CASH FLOW PROJECTION<br />DETERMINE THE TIMING OF CASH DISBURSEMENTS<br />Include all expenses you think you have to make in order to operate your business. <br />These expenses include inventory purchases, labor costs, overhead and administrative expenses, and loan interest and repayments. <br />Also show your opening accounts payable and clearly determine how they will be paid.<br /><br />
  8. 8. PREPARE THE SUMMARY<br />Once you have collected all the information, review the statement to make sure that it is realistic. <br />STEPS OF CASH FLOW PROJECTION<br /><br />
  9. 9. THANK YOU!<br />To view some sample business plans, please visit:<br /><br />