A few weeks ago I helped a friend understand his business cashflow for the first time. After, he said “I would have paid $2,500 for that” Here’s what I did, step-by-step: 1. Figured out his pain points Every business owner is in a different spot. So a quick conversation showed me a few things: - Not sure his burn rate - Not sure what he can afford - Wasn’t sure if his biz was healthy But his goal is to scale the biz this year, so he was nervous about his cashflow and meeting debt/payroll obligations. 2. Built a cashflow model I grabbed a QB login and hooked it up to my fav SMB forecasting tool, @fathomhq (not an ad, I just like it) Within a day, I built a 24 month cashflow and cash balance projection based on an assessment of past expense/revenue trends. The goal here was to create a quick and conservative picture of the future. 3. Fine-tuned it with the owner I jumped back on a call with him to finalize the forecast. Most businesses are driven by a few key inputs: - Revenue - Payroll - Sales/Marketing - Debt obligations - Owner profit So we had a conversation about revenue goals and projections for the big expenses above. 4. Created goals and KPI dashboard As we fine-tuned those key inputs, I was able to show him how they impacted future cashflow. It allowed him to understand things like ‘if I keep having revenue months like February, I’ll take home $__ this year’ Once I saw his eyes light up about a number, I loaded the revenue and cashflow goals into fathom so he could analyze it each month. 5. Created a quick training He wanted to be able to run the model and analysis himself after I built it. So I created a 30-min screen recording of myself and sent it to his team member in charge of it. ~~ The biz is a $0.5M professional service firm with 1 employee. He mentioned understanding his cashflow health is like going to the doctor - he didn’t want to look because he didn’t want bad news. Hopefully this breakdown helped you understand how easy it can be to do the same. A like or RT would be awesome if you found this valuable.