Cash Flow Statement Business Plan

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Cash can be the gasoline that makes a business engine work and keeps your company moving forward.

If you don't already have one for your business, the following tips may help you create a cash flow plan.

However, you can learn whether or not your company is cash flow positive or negative by comparing the beginning and end-of-month balances.

If the end-of-the-month cash balance is higher, the company may be cash flow positive.

Adding all of these numbers up may give you the net cash flow change during the month.

You may want to ask the company accountant to explain these difficult concepts in detail.

Many businesses fail because they run out of cash leaked through losses or poor management processes.

Some small-business owners struggle with the concept that cash is not the same thing as revenue. It only actually gets cash when it collects payments from the customer.

In 1992 I started my third business after failing in two others. It read, “It's cash flow, stupid.” My sign referenced a far more famous sign—"It's the economy, stupid"—that was reportedly hung by a former president's campaign manager that same year.

(It was a reminder that the economy was the issue they were running on.) This sign became my daily reminder and mantra, and having a cash flow plan was critical to my success.


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