Projecting Your Cash – Easier than you think

By Bryce Hansen, Salt Lake SBDC

At the SBDC, a lot of our time with clients is spent guiding them on preparing cash flow projections.   A Cash Flow Projection template is simply a tool for business owners to put their unsaid assumptions regarding financial flows on paper, or in this case, on a spreadsheet.  The purpose is to project at what point a business owner may run out of cash, based on current assumptions.

Most small businesses–which I define here as below $5 million in revenue–can use a simple cash flow projection template and build it out in a way that makes sense for that business and that entrepreneur.  It is meant to be a tool to be used regularly by the business owner to manage their business.

There are various financial management templates out there, but at the core, the focus is on “cash flow,” which can be defined as the total of all incoming cash to the business against the total of all outgoing cash leaving the business.

Incoming cash comes from two main sources:  1) revenue from making sales, or  2) financing from investors or loans from banks or other lending institutions. “Investors” could include you; you might invest your own cash to fund the business.

The outgoing cash streams includes: 1) the “expenses” that your business pays out and  2) payments made to pay down debt (loans) or to pay owners dividends/distributions.

Below is an image of a basic cash flow projection example.  in this case, the business is a  generic owner/operator of a single over-the-road truck operation.  In the “CASH PAID OUT” section, you can see estimates on the amount paid out each month, projected over 12 months.

Cash Flow Projection

Next, we see the revenue model, which is on a separate tab of the Excel workbook.  The revenue model contains revenue “assumptions,” which are organized as a funnel.   At the end of the funnel, we end up with a computed estimated revenue per month, based on our assumptions.  The results are then passed through over to the main Cash Flow Projection tab (shown above on the “Revenue” line):

Revenue Model

Many small businesses can do quite well with a cash flow projection tool using only these two tabs.  For businesses with employees or inventory, we would add separate tabs for both of those areas.  We can also include a detailed operating expenses tab for businesses with a more voluminous number  of expenses.  Overall, this tool can be kept simple and easy to use for any business owner, regardless of prior accounting training.


*Bryce Hansen is the Associate Director at the Salt Lake SBDC Regional Center, located at The Mill, in Sandy, Utah.

**Special thanks to Utah Microloan Fund for their cash flow projection template.