Cash flow statements for a business plan include the Total Projected Costs (all the costs to start up or expand your business and how the costs will be financed.) These costs should have written quotes to be as accurate as possible with the financial planning. This is the Opening Statement of the Cash Flow Projections.

Developing the CASH FLOW Statements…some basic expressions

CASH IN: is the cash invested by you, the business owner(s) as cash equity, other sources of financing such as bank lending, or other financing/equity providers such as Saskatchewan Indian Equity Foundation Inc. (SIEF),   Clarence Campeau Development Fund (CCDF) and the National Research Council Industrial Research Assistance Program (NRC- IRAP).

The most difficult part of the financials for clients, in my experience, is determining the year 1 cash flow statement . The statement of cash flows is useful in defining the short- term viability of a business, its ability to pay its bills.  The sales projections are the amount of revenue a company expects to earn at some point in the future over a specified period of time. It is an estimate of the sales of the business broken down month by month to arrive at the annual sales for the business.  Each line in the sales projections is a revenue stream.

CASH OUT: the cash disbursed for all the costs to start or expand your business and come directly from the total projected costs, the opening statement. Next determine the month by month expense projections.   

It’s difficult to list all the expenses that could occur as each business may be slightly different.  Some of the key expenses that should be listed on the cash flow statements on a monthly basis include:

– Accounting/Bookkeeping, Insurance, Loan payments, Marketing/Promotions/Social Media, Office expenses, Rent/Lease Payments, Repairs and Maintenance, Operating costs such as phone/utilities, Management Salaries and or employee wages and benefits, Meals and Entertainment and Travel.

Essentially, the cash flow statement is concerned with the flow of cash in and out of the business.  The financial plan of a business plan should include 3 years of Cash Flow Projections, the Income Statement and Balance Sheet as financial institutions or funding programs will require these as part of the business plan.

TIPS…

– Estimates or quotes will ensure accuracy of the total project costs.
– The research attained in the written part of your business plan will tie into your financial plan
– The cash flow statements are simply the next step by placing the estimated numbers into a format…CASH In and CASH Out.

For additional information on business plans and financial forecasting, please email Dana at  at OK Consulting.

This blog was provided by Dana Kadilak-Brick, Owner of OK Consulting