Creating Cash Flow Projections

• Create cash flow projections by using a spreadsheet or columnar pad, with each column dedicated to a month of the upcoming year. Label the lines on the top half of the far left column with the different sources of revenue coming into your business, such as loans and wholesale and retail revenue. Leave a line for totaling these expenses. Label the lines on the lower part of the page with the different types of expenses that your business incurs, such as rent, labor, materials, utilities and loan payments.
  
  

Using Cash Flow Projections

• Fill in the lines and columns on your cash flow projection with your best estimate of the amounts your will be spending and receiving in each category. Calculate your total incoming revenue and subtract your total outgoing funds in order to determine the amount you will have on hand at the beginning of each month. Evaluate the information in your cash flow projection to assess which months you will have sufficient capital and which months you will need additional funding. Create savings targets for the bountiful months to cover as many of your expenses as possible during the tighter months.
  
  

Financing

• Seek sources of funding to cover seasonal shortfalls. Apply for small business loans if necessary and if you have sufficient collateral to secure this type of funding. Also apply for small business lines of credit and small business credit cards. Use the resources with the lowest interest rates first, and pay back the debts with the highest interest rates first. Use your cash flow projections to strategize and plan for paying back amounts that you borrow. Do not use business debt as a long-term funding solution, but rather as a short-term measure to address short-term difficulties.
  
  

Other Strategies

• No matter how well you plan for typical business circumstances, there inevitably will be times when you have to scramble to find funds to cover an emergency such as an urgent, costly equipment repair. Develop an arsenal of strategies to use when you exhaust conventional options. Learn to prioritize payments, sending checks first to institutions with hefty late fees, such as credit card companies, as well as agencies that could shut you down if you do not pay them, such as tax and government agencies.