Goal Setting & Planning for 2019

“The best way to predict the future is to create it.”

Abraham Lincoln


Cash Budgeting and Cash Flow Forecasting can seem overwhelming. As entrepreneurs juggling a lot of tasks, it can seem too hard to work out where to start and what to record.

Ultimately, we want a crystal ball to see into the future, failing that…. we need a Cash Flow Forecast.

What is a Cash Flow Forecast?

A cash flow forecast is simply recording the amount of money that is expected to flow in and out of your business every month, months in advance, to make sure you don’t run out of cash.

Primarily, it is created at the end of the year for 12 months of the next year.  (It can be moved on one month at a time, so you are always looking at 12 months).

The first 2/3 months are in greater detail than the last 2/3 months.  You should be very clear on what you want to achieve in the first quarter and then a little bit less as you look 4+ months in advance.  However, your monthly / yearly financial forecast needs to be aligned with the overall goals of your business to ensure you are on the right track.

Cash is king.

Without cash in your business, you can’t pay the bills, pay your people, pay your taxes or pay yourself.

Having a solid cash flow forecast can show you months in advance what your bank account balance will be based on your expected spend (cash out) and expected sales (cash in).

This is a great way to see if you need to increase marketing spend months in advance if an increase in sales for a certain product or service is needed, so you don’t run out of money. It will also tell you if you need to drastically decrease spending, or possibly look at your pricing structure.  Looking at it months in advance relieves pressure building up and gives you time to review options.

‘How do you eat an elephant

One bite at a time’ right? so how do you tackle, planning, forecasting, budgeting, cash in, cash out?  – one bite … or in this case one step at a time.

At times like this, when your tasks seem to be too big to manage, we break everything down into a step by step process –

Step 1

Examine where you are now

It is very important that you take a snapshot of where you are right now in your business.  How much money is coming in and how much money is going out.

Which item spends are recurring i.e. go out every month (typically any direct debits or subscriptions).

Step 2

Forward Spending Predictions

Take the figures you have worked out in step 1 and predict which ones you will keep for the next few months.  Go through your bank statement for the last 12 months if you have them and see which items are going to be repeated.  Put all these amounts into the relevant months for 2019.

Step 3

Additional / Project spending

For our businesses to grow we must always be moving forward and trying to expand.  After all the routine spending has been input to your Cash Flow Forecast, look at your goals and see where any additional spending will be required. Here you are putting the numbers around your plans which is a vital step if they are to be achieved.

Step 4

Forward Sales Predictions

Using the same methodology you used for your spending predictions above, go through how many sales you had in the last 12 months.  Are any of these repeating? Are you launching a new product or service?  If so, based on your last launch how many units or hours do you expect to sell? This can be trial and error, however, assuming there is sound reasoning behind your figures it is an excellent start.

Step 5

Taking one from the other

Total your Expected Sales figure and subtract your Total Expenses figure and the amount you have left is your ‘Expected Cash in / out flow’.   If it is a positive figure it is called Net Cash In, if it is a negative figure it is called Net Cash Out.  This figure should be added (or subtracted) to your bank balance. 

Need Assistance?

With practice this can become very straightforward, however, if you are doing it for the very first time you know I’d love to help you. We both know running out of money and not being prepared financially is a very scary thing.

Join me for a 3-hour Masterclass in Dublin City Centre on 19th Nov where I will be going through step by step how to monetize your goals for 2019.

Get your tickets at:


Not in Dublin or can’t make it?  Book at FREE 30-minute consultation #here# and we can discuss your Cash Flow Forecast.

Next weeks blog:  How to budget for fluctuating Sales


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