If the business plan is a roadmap for planning a new venture, the pro-forma cash flow is the paper it’s printed on. John Welsh published an excellent book a few years back. In his “The Entrepreneur’s Mast Planning Guide”, Welsh made this very point. The cash flow allows the business planner to forecast the success of a business under a variety of conditions. It is a crystal ball that allows you to look into the future of a proposed venture and answer the question, “what if”.My week was spent assembling and tinkering with cash flows relative to the venture I’m seeking funds for. Download this truncated version and tinker around with it. Try changing monthly sales numbers for each month to see what it does to the long term prospects of the venture. Hopefully you’ll see the power of this tool.
This was an interesting window into the planning stages of a venture, including showing how the negative cash flow could turn into positive profits. The level of detail seems high enough to properly track against reality, and the expenses seem expanded far enough, down to monthly pest control, to provide a fairly comprehensive look at how this could go. I would be fascinated to see a comparison of how this compared to what actually happened. Thanks for posting this.
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