How to Write a Business Plan

128 | HOW TO WRITE A BUSINESS PLAN

Open the blank Cash Flow Forecast forms
included on the CD-ROM and follow the
step-by-step instructions below. You’ll be
completing a forecast for the first two years
of your business. Complete every line for
each of the 24 months before going on to
the next line.

CD-ROM
A formatted copy of the Cash
Flow Forecast is provided on the CD-ROM
at the back of this book in Microsoft Excel
format under the filename CashFlow.xls.
The spreadsheet program will automatically
calculate your Monthly Net Cash, Cumulative
Net Cash, and Yearly Totals. Note, if a series of

symbols appear in a box in a spreadsheet

that means that you need to widen the
column in order to display the numbers. If
you use a spreadsheet program that cannot
convert the Excel format, you set up the form
in your program using the same categories
as the completed Cash Flow Forecast in this
chapter. (Make sure that the column and row
headings are the same.)

1. Profit/(Loss). To begin, take out the Profit
   and Loss Forecast you completed in
   Chapter 6 and copy the monthly profit/
   (loss) from line 6 onto the first line of the
   Cash Flow Forecast form. The profits or
   losses you show have already taken into
   account the normal expenses of running
   a business like rent, wages and salaries,
   and so forth. You won’t have to worry
   about those costs in this forecast.

CAUTiON

if any of your figures are losses, place

brackets around them. Otherwise, your entire

Cash Flow Forecast will be seriously inaccurate.

2. Credit Sales. Skip ahead to line 4 if
   you don’t plan to sell merchandise or
   services on credit. If you sell merchan-
   dise or services on credit, the customer
   receives the goods or services right
   away. Even though you incur costs,
   you don’t get paid right away. Credit
   sales create bills people owe you; they
   are called your “accounts receivable”
   because you will receive the money
   soon. (When you buy goods on credit,
   you create bills you owe others. These
   are called your “accounts payable”
   because you will pay them soon.)
   Most businesses that sell to other
   businesses should plan for some sales
   on credit. Most businesses that sell only
   or primarily to retail consumers can plan
   to sell mostly for cash, including checks
   and credit cards.

TiP

Credit card note: For purposes of this

discussion, sales on credit cards are the same

as cash sales, except for the processing fees

the bank charges you. If you use an electronic

terminal, the money is credited to your bank

account right away, and if you use a paper

imprinter, the money is deposited to your

account in a few days.