Blog articles about business planning and development
Artificial intelligence needs to be a consideration when you buy a business, both positively and negatively. Positively, you could introduce AI after buying the business to make it more efficient and profitable, but negatively, avoid a business that could be destroyed due to AI developments.
The reason why 90% of business buyers fail is because they are first timers, they have never gone through the process before, and they have zero experience in the business buying process.
A cash flow projection for a bank loan is best reported with a forecast period of 12-months or more, but a 36-month cash flow projection with profit and loss, and balance sheets included is recommended. The cash flow projection must demonstrate the business will be profitable and cash-flow positive.
There are 3 main ways to increase profit of your business, which are: Raise your prices, increase your average transaction value and reduce costs. But profits can also be increased by selling more and through greater cost efficiency too.
The two main types of cash flow forecast are the direct method used by treasury and cash managers to manage day to day cash and funding requirements vs the indirect method used by businesses to project future cash flows, projected balance sheets and profit and loss to plan and budget.
The main disadvantage to cash flow forecasts is the reliance on historic data to predict future cash flows for the business. You are also reliant on your best estimates of what will happen in the future, but these could be wrong.