Ryan Carson, who is currently managing 4 internet businesses and a conference/training company posted some level-headed tips for forecasting cashflow. Real businesses can not hope some corporate buyer or magic elf will resolve their fiscal shortcoming. Real businesses know how much cash they have and try and spend within those limits. Cashflow is not nearly as meaningful a gauge as earnings, but still much better indicator of a company’s health than forecasting revenues, burnrate or worse!

Anyone that 100% wants their business to be there in a year has to be prepared for the worst and cannot risk lying to themselves. Don’t get me wrong it’s fine taking a big risk with your business … if you’re okay losing it.

Here’s are some other cashflow tips that come to mind.

Prepare for seasonal differences. Having 3 great months in the spring in no way guarantees the summer or winter will be in line. I know a large advertising concern whose sales people only work in the fall and spring when budgets are spent, because they can’t even get anyone to answer their calls in the other months

Keep track of how many months of expenses you have in the bank. Traditionally a healthy business has six months expenses in the bank. This is hard to do, but always know how many months (or weeks) you do have and strive to improve on that in the future

[Maybe John V will read this and add some more ...]