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2. Create best and worst case scenarios and create appropriate responses to both scenarios. For example, if your best case scenario is to increase sales by 50%, how will you use the profits? Will you put the profits back into the company by investing in new equipment, training, etc.? If your worst case scenario is a drop in sales by 50%, how will you continue to cover your monthly expenses? By planning for the best and worst case scenarios, you�ll be ready for any situation.

3. When estimating your future income, realize that some people will pay late, and account for that fact in your projection.

1. 4. Charge what you�re worth. Many businesses, especially service professionals, under-charge when they are first starting out. This is a great way to go out of business. Make sure you are charging what you�re worth, and remember you�re in business to make money, not to give your expertise away for free.
2. 5. Watch your business spending. Focus on the value the item brings to your business, and avoid lavish spending (i.e., do you really need the fastest, newest computer available?). 6. Don�t hire until necessary. Consider using virtual assistants or temporary employees before hiring permanent employees.

7. Give incentives for early payment for products and services. On the flip side, chase down invoices the minute they�re late. Charge interest or late fees to encourage timely payments. 8. Update your cash flow regularly. Your cash flow plan will change frequently as your business grows. You may want to update your cash flow plan weekly when you first get started, then switch to monthly once you�ve got a good handle on your cash flow.

Remember - whether you are a new or growing business, your cash flow projection can make the difference between success and failure.

You�ve heard it a million times � cash flow can make or break a business. Lack of cash flow planning is the reason why many businesses fail. In fact, many PROFITABLE businesses fail because of cash flow issues. Without adequate cash flow, you can�t pay your bills and you can�t make plans for your business.

So� what is cash flow planning? Cash flow planning is projecting your future cash inflows from sales, services, and loans, and comparing them to your future cash flow needs (suppliers, salaries/wages, loan payments, taxes, etc.). The difference between the two is your net cash flow.