Okay, this year the economy sucks. Yes, we all know it by now. However, for the entreprenuer, it is especially dangerous. The worst thing a small business can do is file for bankruptsy. Of course, you can only go bankrupt if you don't have enough money to pay your debts. The secret is cash flow.
I use a simple process that helps me see where the cash is coming from and going to. For a small business, cash truly is king. Here is how it works:
1. I create a spreadsheet showing all the months across the top row.
2. Then down the side I list all the sources and uses of cash. For instance, free cash flow from RentQuick is listed by each month. If the cash flow is income it is listed as a positive. If the cash flow is an expeniture, then it is listed as a negative. Other items are estimate tax payments, personal use payment, property tax, investments, insurance payments, etc. I list the net cash flow for each business I have. So a startup might be negative and a cash cow might be positive.
3. I then add up all the sources and uses by the month. The resulting spreadsheet shows when I need money and by how much.