Where will your business revenue come from in 2010? Do you expect to expand your customer base? Will you sell more B2B products or services? How will your revenues affect cash flows?
All these are important questions you need to answer to effectively manage your income and cash flow. As 2010 begins, be sure to create a financial model that will help you visualize where the money will be.
Read the Future by Looking at the Past
Financial models for a small business do not have to be rocket science, and you do not have to be a professional financial analyst to create them either. Look at your income records for the past three years. You can easily pull data from accounting software and use it to create a spreadsheet. Utilize chart functions in Excel to get a visual of how much revenue your business receives each particular month. Look for trends in growth or ebbing patterns.
Your past revenue patterns can help your financial forecasting by giving you quantifiable data. Your job is to analyze the historical data to find trends that allow you to prepare for your future income.
Identify Your Peak Business Periods
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