Cash Flow Projection
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Simply put, the money that comes in and goes out of your eBay business is your cash flow. Where the other types of projections predict long-term profitability, the cash flow projection focuses on day-to-day operations. Can you survive in those in-between times when you must pay bills but there are no eBay sales for that week? For example, the cash flow for the first few months of any business is often negative. In order to survive, you may need to borrow money during that period. Cash flow projections are useful for every business, but they’re particularly helpful if you have not yet opened.
To make your cash flow projection, you’ll have to prepare a spending plan, setting out items your business needs to buy and expenses you will need to pay. You then feed these numbers, along with information from your profit and loss forecast, into a spreadsheet. A business plan guide can also help you with this task — for example, Business Plan Pro or Mike McKeever’s How to Write a Business Plan (Nolo) can simplify this procedure. If you have more money to spend on financial projections ($200 to $1,000), you may want to consider paying a bookkeeper with small business experience to help you polish your forecasts.