A cash flow statement provides a glimpse of how much money a business has at any given time and when it is likely to need more cash. Analyze the results of the cash flow statement briefly and include this analysis in your business plan. See the glossary of terms in the toolbox . Tips As with all financial documents, have your cash flow statement prepared or at least reviewed by a reputable accountant. Avoid an unrealistically quick ramp-up of sales.
Most companies experience a gradual increase in sales, even on a monthly basis.
A sudden unexplained spike will stand-out and not look like an honest appraisal of your business. Include effects of seasonality and business cycles in all projections. For example, if you are in the gift business, you would need to show the Christmas buying season or the Wedding season. If you're a consultant, you might experience higher sales late in the year when companies are trying to use up their annual funds, or at the beginning of the year after budgets are approved. Do not fall in to the common trap of underestimating cash flow needs.