FOR A BUSINESS to be successful, it needs to have a good cash flow plan.  This cash flow plan will contain forecasts as well as shortfalls in management.  Forecasts give amounts of money that will be flowing in and out of a business, while shortfall management helps a business to have a strategy for times when cash will be in short supply.  When both of these are included in a cash flow plan, they enable a business to be able to handle both extremes of cash flow, making it a success.  Some rules that can be included when developing a cash flow plan include:

Projection of Monthly Sales

One should be able to project all sales that they are likely to make in a month.  However, these projections should not be on a higher side so as to avoid disappointments if a target is not reached.  All sales figures that will be used in this cash flow plan should be amounts that a business can reasonably be able to achieve.  However, care should be taken that one does not use this to project their business success as it is only a process that is used to ensure that a business has money for its operations.


One needs to understand that a sale can be made in terms of cash or credits cards.  Though there are those that will be paid for immediately, there are some sales that take a few days to mature.  This period can be 30, 60 or 180 days.  One needs to put timing of these sales into this plan as some may take longer than others.


For each month, a business usually incurs expenses in terms of rent, telephone expenses, and electricity, among others.  One can make their plan simpler by combining all these expenses into one big sum.  This will ensure that all expenses have been accounted for so as to get proper estimates of their cash flow.  This will also enable a business to know exactly how much they need each month so that they can stay in operation, as these are important expenses that it cannot operate without.

Growth Adjustments

All businesses will need to grow at some point.  An estimate of money that will be used for growth needs to be incorporated into a cash flow plan.  This will ensure that there are sufficient funds for growth.  When a business grows, they may have new expenses such as for purchase of equipment and this money needs to be available as growth usually comes before sales.

Unforeseen Factors

Things will never always go according to plan.  This also applies to businesses and should be included in a cash flow plan.  This will allow a business to be able to capitalize whenever an opportunity presents itself.  One needs to be optimistic when planning for such situations because if they do not come to pass then a business will be left with more money rather than have to spend more money if it arises.