Do you have a business plan? If so, how detailed is it? Does it include forecasts of income and balance sheets? And most importantly, does it include forecasts of cash flow?
Does your business plan model allow you to modify important drivers, such as variations in monthly sales levels, variations by product, gross profit percentage assumptions, changes in wage rates, and changes in your staffing? Does it allow for capital expenditures, asset funding, and depreciation expense?
Is your business plan compared to actual results on a monthly basis? Is it adjusted to reflect new realities, or errors in basic assumptions?
If you don’t have a business plan, or if you could not answer yes to ALL of the above questions, I highly recommend that you consider getting these things in place.
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