CASH FLOW

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CASH FLOW

• Tim ONeil, J.D., CPA
• Entrepreneur

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Agenda

• 1. Define Cash Flow
• 2. Three Uses of Cash
• 3. Three Sources of Cash
• 4. Cash Flow Budget
• 5. Define Burn Rate
• 6. Avoiding the Cash Wall
• 7. Simple Cash Flow Worksheet
• 8. Be My Financial Advisor

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What is Cash Flow

• The movement and availability of LIQUID FUNDS in
  any business at a certain time
• The ABILITY of a business to pay its current
  obligations and bills
• The PRIMARY RESOURCE needed to SUSTAIN a business
  in tough times, and GROW it over time.

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Three Uses Of Cash

• Operations
• Cash necessary to operate
• Capacity Building
• Cash necessary to build the platform
• Pay Back
• Cash necessary to pay lenders, investors and
  owners

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Three Sources of Cash

• Operations
• Cash Income less Cash Expenses
• Timing Issues (Receivables/Payables/Inventory)
• Investments
• Sale of Long-term Assets
• Financing
• Loans, Outside Investors, Owners Pocket

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CASH FLOW BUDGET
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Burn Rate

• Must master or business will die!
• Burn Rate is the rate a company literally
  burns through its cash before it becomes a
  positive producer of cash
• Must have adequate starting cash and/or access to
  additional cash until time at which business
  turns profitable
• Budget Accurately or Fail!

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Avoiding the Cash Wall

• Prepare Detailed Projections
• Carefully Monitor
• Calculate Burn Rate
• Work on Timing Issues
• Manage Expectations

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Simple Cash Flow Worksheet

• Starting Cash __________
• Plus Sources (Loans, etc.) __________
• Sources of Cash (Add)
• Cash Revenues __________
• Uses of Cash (Subtract)
• Inventory __________
• Salaries __________
• Advertising Expenses __________
• Equipment __________
• Computer __________
• Office Supplies __________
• Ending Cash __________

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Summary

• CASH IS KING!