See It Before It Hits: Why Cash Flow Forecasting Should Be in Every Business Owner’s Toolkit
We spent April diving deep into one of the smartest ways to plan ahead financially: cash flow forecasting. Whether you're aiming for growth, navigating uncertainty, or just tired of guessing, a rolling forecast gives you the clarity and control to lead your business with confidence.
Using Profit First principles and real-world strategy, this session laid out a step-by-step system to help business owners make better decisions—before cash crunches hit.
Key Takeaways
Forecasting = Power. Proactive planning helps you spot cash gaps months in advance—and steer clear of financial surprises.
Profit First works. Allocating revenue into clear “buckets” helps ensure profitability, protects your owner’s pay, and keeps taxes handled.
Rolling forecasts are living tools. When updated monthly, they adapt to your business’s realities in real time.
Conservative revenue + detailed expenses = smarter strategy. Strong forecasts start with honest numbers.
This tool works for everyone. From early-stage startups to million-dollar firms, forecasting adds insight at every level.
Workshop Topics at a Glance
📌 Profit First in Practice
Allocate income into Profit (10%), Owner’s Pay (35%), Taxes (15%), and Operating Expenses (40%)
Adjust percentages as your business matures
Even starting with 1% to Profit creates discipline and long-term momentum
📌 Creating a 12-Month Rolling Forecast
Start with last year’s data
Pull a monthly Profit & Loss report. Look for seasonality, large annual expenses (like insurance or software), and unusual outliers.
Project revenue conservatively
Use average or season-based estimates—skip best-case guesses and plan for what’s most likely.
Forecast expenses line by line
Categorize into fixed, variable, and discretionary. Tie certain expenses (like merchant fees) to projected revenue.
Update monthly
Drop the oldest month, add the next, and revise based on real data and trends.
Not sure where to start? We shared a spreadsheet template in the workshop that walks you through all of this—feel free to adapt it to your needs.
📌 Using Forecasts to Drive Decisions
Anticipate and plan for cash shortfalls before they derail your momentum
Test decisions like hiring or big purchases using real numbers
Adjust pay or costs proactively—not in a panic
📌 Forecasting for Startups & Pre-Profit Businesses
Track your burn rate and capital runway
Set check-in points to reassess before cash runs low
Make data-driven decisions, not emotional ones
📌 Bookkeeping Best Practices for Better Forecasting
Record gross revenue before fees
Keep categories consistent and specific
Reconcile monthly to ensure accuracy and trust in your data
You’re Not Alone
Many of our clients say they felt overwhelmed before building their first forecast. But once they got started—even with a simple version—they felt more empowered and less anxious about the future.
Looking Ahead: Make Forecasting Work Harder for You
Creating a forecast is just the beginning. Knowing how to use it to course-correct in real time is what keeps your business healthy, resilient, and profitable.
Next up: “Mid-Year Game Plan: Make the Second Half Your Most Profitable Yet.”
In our May blog, we’ll share how to analyze your YTD numbers, pivot smartly, and finish 2025 strong.