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Estimating Monthly Cash Flow

1 min. read

The next step is determining your month-by-month cash needs by looking at how much cash will enter the practice in the form of receipts each month and how much will need to be paid out.

Typically‚Äč, most startup practices will not have a positive cash flow for several months because most of your expenses are fixed, and your receipts will not be enough to pay the bills. Since it is hard to predict what is going to happen, you have to estimate. It may be beneficial to create three separate scenarios (best, worst and average).

Prepare a table for the first 12 months of practice, or until you can show a positive cash flow. Be sure to include these estimations in the financial section of your business plan.

Step 1—Cash In

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