The first stage of forecasting your cash flow is gathering information on how you’ve done historically. Look back at your business performance and gather data like:
- Total sales by day, week, month and any other relevant time periods
- Revenue broken down by income streams, products and services
- Expenses in all your business budget areas
- Marketing performance and return on investment
- Analytics like website visits, calls taken, customer service resolutions, etc.
- Anything else that might be relevant
What you want to understand here is how your sales, revenue and cash flow change over time. All of the above areas have a direct impact on the money in your business, and analyzing how things changed can help you uncover surprising data.
You’ve pulled together all the data for Blue Widget Co. and know exactly how many widgets you sell each week and how much money that brings in. You’ve been able to tie any increases back to marketing. You also understand exactly how much you’re spending in your business budget on a weekly basis.