Make Decisions Using Pulse’s Cash Flow Scenarios
Planning for the future isn’t just necessary to grow your business — it’ll also give you peace of mind. Here are some tips for using Pulse to predict future cash flow so you can make decisions with confidence.
Set Goals, Monitor Cash Flow
You can’t run your business blind. Well, you could, but doing so has consequences. Many startups try to shoot from the hip when it comes to growing their business, but this approach is fraught with common mistakes and failures.
If you’re not careful, you might make the mistake of spending money on resources that can wait until you are in a better cash position. Or, your market’s seasonality can have an impact on your cash flow. Such actions can leave you without the cash you need for emergencies or dealing with business needs at the right time.
The good news is, avoiding these mistakes is easy with a combination of goal setting and cash flow monitoring.
For example, imagine planning for a large trade show with high expenditures. If you see that your cash position will be weak around the time of the show, you can plan ahead and make the decision to hold off on purchasing that new enterprise software system or hiring a new full-time employee.
Instead, you can wait for the boost you’ll get from your trade show lead conversions and reassess what the infusion of revenue will do for your future cash flow. This allows you to manage by the numbers and connect clearly with your cash position. Clear data is empowering and helps you plan your spending and timeline.
Clear data is empowering and helps you plan your spending and timeline.
Play Out Different Scenarios
You can use Pulse to play out scenarios to give you clarity and help you reach the goals you have set. Whether your business is starting up or going strong for years, this process is necessary to keep your profitability high and your cash flow positive.
A great way to do this is to put all of the deals you’re working as separate income items for different projects. You can adjust your income and game out different scenarios to see what you would need to do if a project falls through or unexpected income is generated. For example, if you have a $3,500 deal with a high probability of closing with ABC Company, enter a project in the income area of Pulse with a project with ABC Company.
From there, toggle the inclusion of those income line items by checking or unchecking them. Doing this will allow you to see how important each item is to your cash flow situation at different points in time, which will give you further sensitivity to different possibilities. It gets you emotionally involved with the goal, and that is worth gold.
Note: this article was originally posted on the Pulse blog.
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