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Your cash flow projection is basically an educated guess about future scenarios. It shows how the cash in your account will go up and down over the months that you are in business. It has nothing to do with how profitable you are. If you see a negative number in the cash flow, you are out of cash. By looking ahead, you can foresee this possibility and make plans to cover the situation in plenty of time.

For now, concentrate on forecasting your cash needs for your first year in business. The cash flow into your business depends on how many people want your cleaning service at the price you charge. Understanding the cash needed to maintain your business and ensuring that more cash comes in than goes out is the major goal of your financial planning.

All the costs you incur during operations are listed under “Expenses.” The first month shows initial start-up expenses such as equipment and supplies, and other one-time expenses. Salaries will be low for Month 1; usually you are not open for the first month because you are setting up your office and training staff. Operating expenses for the first month will also be low. Some of your start-up bills will actually be paid in the second or even third month, when the invoices arrive. These invoices may include legal and accounting fees, or may be for your purchase of extra equipment. Your first few months in business will have many of these one-time costs as you add to your business.

The figures for sales will be guesses but they are still useful in terms of seeing how sales affect your business. It is not unusual to find that your expense predictions are within 10 percent of what you will actually spend. That said, you should reward yourself for each month your actual figures are close to your projected figures.

Review your cash flow projection on a quarterly basis at the very least. You will have to update this form to reflect any changes. For example, the rent for your office may increase, you may want to plan for a major purchase, or you may want to hire employees.