Confessions from a Reformed Spender: Cash Flow Analysis is my new BFF

Like many people, when I started my business I read books, visited entrepreneur websites, spoke to advisors, went to workshops  and of course, shared, liked, posted many, many entrepreneur quotes.  A lot of information stuck with me but cash flow has stuck with me forever.  It stuck with me but it had no meaning until 3 years later.

Here’s Google’s definition, “the total amount of money being transferred into and out of a business, especially as affecting liquidity. It meant nothing to me. This definition is the one that resonates; Cash flow analysis is the study of a business’ cash inflows and outflows per cycle, with the goal of ensuring adequate cash flow for business operations.

Anothercfqueen reason I didn’t get it, and this is the truth, I’m a reformed spender. As a reformed spender, when money came in, money went out. It wasn’t until I missed mortgage payments and bills were piling up  that I started to realize that my spending strategy would not work if I needed money past the moment I received it.  I learned to save but still cash flow was just a term that made me download a spreadsheet from SCORE, fill it out and I even set a task in Asana to check it monthly but it had no real meaning, yet,  for my business.

It took me 3 years because it took that me long to create a steady flow and mix of retainer and project-based contracts. This gave me cash to analyze.  And more importantly, when I moved to Philadelphia I needed customers quick and wanted to know how much I had to dedicate to growing my business.  It was then, my spreadsheet made sense.

My new BFF is my cash flow report. Like a best friend it  tells me, with complete honesty,  at any moment in time, how much I have to invest, forecasting revenue I will need  in the next month, few months a year.  More importantly, it has helped me determine how much I have invest in the marketing of my business past networking and social media.

Growing a business is always a time for learning, changing and moving on and I’m so glad that I have moved on to be a cash flow queen!

  4 comments for “Confessions from a Reformed Spender: Cash Flow Analysis is my new BFF

  1. May 9, 2016 at 9:32 pm

    Maisha, you’re not alone. When I started Grow Beyond I thought I’d be helping solopreneurs with marketing & communications strategy, but I quickly realized they needed much more fundamental support in understanding the financials of their business so they could then make informed decisions about their marketing and communications. So, I changed my service offering to start with addressing this critical need and that really changed my business.

    Liked by 1 person

    • May 10, 2016 at 12:39 am

      Great minds. We started off with the same thoughts and then did the same thing. I added a couple CFOs as partners so we could match marketing to realistic forecasts. My marketing plans service includes a financial review.


  2. April 9, 2019 at 3:20 pm

    Well I sincerely enjoyed reading it. This article procured by you is very effective for correct planning.

    Liked by 1 person

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