I was speaking to a salon owner just the other day who was in major panic mode, so we were going into some depth on her numbers. She had lost some regular income recently and she also wanted to open another salon. When I really got into it with her it turns out she was making the numbers up off the top of her head and the income she had lost, she’d already made most of it up through other means.
Why was she panicking? Because she really didn’t know her numbers and spends a lot of time guessing what they are and then panicking. So we sat down and started putting together some cashflow projections for her. Cashflow projections are great because it’s purely your cash in and cash out, so it lets you look at when you might run out of cash at the bank.
This is why most businesses go out of business. It could be caused by poor credit control, or spending too much and not being aware of where your money is going. Or just poor planning! But your cashflow projections really help you keep an eye on this and pinpoint any pinch points (could be caused by a tax bill or VAT payment). But when you have knowledge it makes you more powerful.
So once we had crunched some numbers and estimated her sales (based on previous sales) it was obvious that her business wasn’t failing as she thought. The cash was growing at the bank and it meant she could start to take more money out of the business for herself. Cashflow projections can help you feel more comfortable with your business and really aid in making decisions. That’s why I ran a webinar on this topic in April and luckily I recorded it.
We have set up a hub where all these great resources are stored and, even better, it’s free to join. Click the link to get access, https://www.businessmentoring.online/offers/PigDcZyp