The lifeblood of any business is its ability to collect cash and
pay bills as well as pay its employees, particularly its owners.
Far too often small businesses are profitable, but they do not have
enough operating capital to meet their current needs. Consequently,
they may be forced to sell out to a stronger competitor, sell a
portion of the company to investors at an undesirable price or,
close the doors and put the company out of business. None of these
alternatives is typically what the owners expected when starting
the business. To try and compensate for this it is important that
all business owners have a plan for their cash by preparing a cash
forecast.
Cash flow projections can be very slow, time consuming, and
tedious to undertake. It is often very tempting to hire someone
else to prepare the projections for you. There are a variety of
individuals who can help you do this, but the critical factor is
that they only help.
