Tracking your business’s cash flow is more important than you think. Without knowing your business’s financial standing will put your business at risk of spending and owing more than your business can pay back. To prevent this from happening, creating a cash flow projection is needed. But before creating a cash flow projection for your business, it is critical to determine the key assumptions of your business’s cash flow such as expected operating profits but also investments in net working capital and CAPEX.
In some projections, business professionals tend to hike up the sales estimates to lure potential investors. But, by doing so, the risk of creating a financial shortfall is higher and more possible. Creating a cash flow projection demands accuracy as it will help you determine a realistic outcome and result in the future. It takes guts to be as honest you can be but, for the betterment of your business, it is worth it as you will be able to help your business more as you strategize in many ways to find the best ways to grow your business financially.
Hiring a professional to help in creating a cash flow projection is what others usually do but another way to acquire it is by simply downloading a cash flow projection template and Do-It-Yourself. Whether 3 year financial projection template or covering more years, depends on your preference. For only a little amount, you can download a 3 year financial projection template easily and complete it yourself. If you don’t know where to get these templates, you can check out eFinancialModels. A platform where you can acquire different financial model templates specially designed for almost all industries. The templates are made by experienced and skilled professionals in financial modeling so it will look like you hired a professional to work for you and at the same time you will gain knowledge as you know more about managing your business’s financing.
Before you start with crunching those numbers, learn more about how to conduct a financial projection as well as understand it in detail, you can read more here first: Using Cash Flow Projection for your Business Plan. There will be template suggestions included too so you can start to download a 3 year financial projection template and create your very own cash flow projection report for your business.