Stop Guessing, Start Forecasting: A Founder’s Cash Survival Guide
t’s a bright Monday morning, birds are chirping, coffee smells amazing, and you—being the ambitious founder that you are—decide it’s time to take your business to the next level. You’ve heard about this brand-new machine that promises to make your business twice as efficient. Twice! Excited, you rush to the store, find the perfect model, and head confidently to the cashier.
You hand over your card, swipe it, and wait for the little green light.
Instead, the cashier frowns. “Declined.”
“Hmm, that’s odd. Try again,” you say, with a nervous chuckle.
Swipe again. Declined.
The cashier’s expression softens from irritated to sympathetic. You know that look—the one people give when they want to pat you on the back and say, “It’s going to be okay.”
Then reality hits you harder than Monday morning traffic: You don’t have enough balance in your account to pay. Your stomach drops. Sweat beads on your forehead. And in your mind, a single thought screams—How did this happen?
The answer? Poor cash management.
What is Cash Flow Forecasting?
Cash flow forecasting means predicting how money will move in and out of your business in the future. You look at past numbers—how much came in (revenue) and how much went out (expenses)—then make realistic estimates for the months ahead.
Example:
If you expect sales to grow 5% each month, add that in.
If expenses are likely to rise by 4%, include that too.
Forecasts can be monthly, quarterly, or yearly. Most businesses aim for a 12-month forecast to get a clear view of their financial runway.
Simple Formula:
Opening balance + money in – money out = cash left (or burned).
What Do You Include in a Cash Flow Forecast?
When building a cash flow forecast, here are the key items to list:
Revenue: Sales and customer payments.
Operating expenses: Salaries, rent, utilities, internet, and even coffee.
Taxes: Regular tax obligations (always on time, no excuses).
Subscriptions: Business tools and services you pay for monthly.
Asset purchases: New laptops, machinery, furniture, or equipment.
Asset sales: Money earned from selling unused equipment.
Funding: Investor money, loans, or grants.
New product launches: Extra costs before revenue starts rolling in.
Extra Factors to Consider
To make your forecast more accurate, also think about:
Sales trends: Are sales going up or down compared to past months?
Customer churn: How many customers are leaving each month?
Monthly Recurring Revenue (MRR): Predictable income you can rely on.
Seasonality: Do sales spike during holidays or slow down in certain months?
Payment delays: Are customers paying late and affecting your cash flow?
Why Bother with Cash Flow Forecasting?
Now here’s the fun part. Why should you care about all this? Because forecasting isn’t just numbers—it’s survival.
Investors love it. Before they give you money, they want to see that you know what you’re doing with the money you already have. A neat cash flow forecast tells them, “Hey, I’m responsible. Trust me.”
No surprises. Imagine never being shocked by a big bill or empty account. With a forecast, you’ll always know what’s coming.
Understand your burn rate. Burn rate means how quickly you’re spending money. Your forecast shows when you might run out so you can prepare in advance.
Test pricing strategies. Should your product cost £10 or £12? With a forecast, you can see how each choice changes your money situation. It’s like a test run for your wallet.
Pro Tip: Build your first cash flow forecast after a year in business, when you have real data on revenue, costs, and customer habits to guide accurate predictions.
But Isn’t This Complicated?
Not really. At first, it might look scary. You don’t have to be a math genius to do this.
You’ve got options:
Use software. There are tools that do the hard work for you. Think of them as financial GPS—they tell you where you’re heading.
Hire an accountant. Accountants are like money magicians. They can take your messy numbers and turn them into a clear forecast.
Either way, once you’ve got your forecast in place, you can relax. Just peace of mind, knowing you’re in control.
As a founder, you already juggle a million things—products, customers, marketing, employees. The last thing you want is to get tripped up by money surprises.
Cash flow forecasting is your shield. It keeps you prepared, it gives you confidence, and it shows investors you’re serious.
So go ahead. Start small. Write down what you expect to earn and spend. Make your first forecast. And when you see the magic of knowing your financial future, you’ll wonder how you ever lived without it.
