How often do you do cash flows? Hourly, daily, weekly?

How often do you do cash flows?

Some do one for the quarter or perhaps even the month, real dedicated business owner may even do it weekly. I have been known to do a quick one at a red light waiting for it to turn green, on the back of a business card.

My kids love to discover them in many strange and weird places. You can always tell what book I read last around the house as it always has a half dozen cash flows in the inside covers.

Am I crazy? Neurotic? Obsessive? Maybe, but I prefer to know what is going on in a changing environment and small business is always a changing environment.

When things change, as they always do, a new order, a late payment, a few bills requiring satisfaction, a trip I want to take, repairs that were unscheduled, developing a new product, a new add program, a bounced check from a preferred customer, a large unexpected bill.  Taxes, etc and on it goes. How does a small business owner get his arms around the impact of such changes if not through the perspective of a cash flow?
A cash flow, simply described, is a chart with income over expenses spread over time, a week, a month, even a year. To me a week is a long time period and a month is about as far a I can see and plan.

I am doing weekly cash flows almost daily in a rapidly changing environment. Certainly weekly for the month with many renditions to see what happens in different scenarios. It is the ultimate  ’what if’ game played with your cash and your business. How else does one see what is happening and how else can one plan and figure out what to do in response to changing conditions and circumstances.

To me a cash flow is a beautiful thing. It tells me everything I need to know over a fairly short period of time. The impact is immediate, and very focused, cash in and cash out. It tells me if I am in trouble or ok. It removes stress as I come out with a new plan, knowing I  have payroll covered or an important commission check available or an inventory check available or whatever it is I must plan for.

How else can I tell other then doing a quick cash flow based on the newest circumstances that I am aware of at that minute.
Its great entertainment, it allows me to stretch my imagination, and think through the variables every small business owner must consider, but it also provides a conclusion for each scenario, an answer to what happens if…

If you are not a cash flow  junkie and you own a small business you need to try it out. At least weekly and then definitely when unexpected events  happen that change the cash flow. You must see what the impact is, and therefore how to plan accordingly.

Yes its true, I have been caught doing them at red lights, even stop signs, certainly at baseball games and definitely when I am alone and thinking of different strategies and different actions. It all results in a different cash flow and I need to know what each one tells me as how else can I run a business.

Try it, it is a safe addiction and may even help you see the path through the fog.