What do you do if you are in danger of being buried by growth? Such a situation can be both good and bad. It's good that you apparently have a product or service that is in great demand. But it's bad because you probably are now strapped for cash.
So, do you simply forsake your business plan to concede to the new conditions? Absolutely not. In fact, your problem may be that you neglected your plan. Or maybe you reached the objectives outlined in it and failed to come up with a revised version to plot your company's future cash needs. Sit down with your managers (you probably have some now) and generate a new plan that takes growth and resulting cash shortages into consideration.
You also need to give more attention to your cash-flow chart. Keep it updated so that it clarifies your position at any particular point in time. The following can serve as a guide to making your chart more detailed and meaningful:
Projected Statement of Monthly Cash Flow
Date Prepared _______________________
Prepared by _______________________
Reviewed by _______________________
For the Year Ending _______________, 199__
Month 1 2 3 4 5 6 7 8 9 10 11 12
Sales (this year)
Accounts receivable (from last year)
TOTAL CASH RECEIPTS
Cost of sales --labor
Accounts payable last year
Long-term debt repayment
Interest on debt --long term