You need a way to keep track of the money that comes in and the money that goes out. Keeping track of these numbers helps you know how much money you should have on hand at any given time. You'll see when money might be tight as well as when you'll have less to worry about in terms of cash flow. That's why this is called a cash flow statement.
Remember that in a first year of business it's not uncommon to have some months where the money available is a negative. If you have a negative balance it might mean that you need to seek out another loan or make some changes in the amount of money being spent on the biz.
Use the Cash Now, Cash Later tool to start planning your cash
flow. Estimate your income and costs for the first three months
of your biz. This way you'll have a sense of the amount of money
you'll need on hand when you get started. (The rule of thumb
is that a new biz needs money to operate for three months before
it will make enough to cover all costs.) Remember you will also
have one time start-up costs. Use How
much is Enough? to figure out how much those expenses will
be. In most cases you'll have to save or borrow in order to
take care of your start-up costs and to have money to keep you
going for the first few months.
If you have a question about any of the categories roll your mouse over the category heading and learn more. When you are ready to fill in your own numbers download the spreadsheet. You can rollover areas to learn more about them.