One of the smartest things you can do in your business is create and maintain monthly financial projections. A full set of projections that goes all the way down to forecasting cash flow is critical to making smart (and better) business decisions.
One thing that may be stopping you from doing cash flow projections is that little voice in your head saying “But I don’t know exactly what the future holds – what if I’m wrong in my projections?”
Let’s look at an example that will show you why fear of precision is your enemy, not your friend.
Picture this in your mind. You are in Honolulu, Hawaii. Here’s the weather you are enjoying on a beautiful Sunday afternoon.
But you are leaving for Flagstaff, Arizona on Monday. Here’s the weather forecast there.
Are weather forecasts always exactly right? Nope.
Is it probably going to be cold and likely to snow where you are going? Yep.
Is there any question what kind of clothes you should pack for your trip? Nope.
The view ahead is very important
The forecast gives you enough information to be smart about what you pack for your trip. That’s where it brings value for you.
It’s not whether the forecasted temperature is exactly right or the exact day of the snow is right. The value is in the overall view of what you are likely to experience in the very near future.
Monthly financial and cash flow projections are the same way.
Use financial projections to give you a view into what lies ahead so your journey toward winning in business is a safe and successful one.
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