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This is an extract from the 30 Day Becoming a VA Challenge by @helenstothard

We’ve worked out our rates. We know how many hours’ capacity we have each week and by now we should know our expected expenses.

We’re going to write a cash flow projection to see what our business will look like over a period of months.

I did this for both a 5 to 9 business and a full time business in order to help me make the decision to go full time.

The beauty of a cash flow projection is that you can change one figure and the rest of the projection re-calculates automatically. This is an excellent tool for making sure your rate is correct. You can also use it to test what effect a special offer rate would have on your business.

Your projection works best as a horizontal spreadsheet. The specific items should be down the left-hand side and the months across the top.

The top of the cash flow is for your income. Break this down into clients, or tasks, so that the income is divided into categories. For example:

  • Balance b/f
  • Income
  • Client One
  • Client Two
  • Online Training
  • Commissions
  • Total Income

Now show your expenditure under the Income.

  • Expenditure
  • Insurances
  • Advertising
  • Telephone/Internet
  • Networking
  • Subscriptions
  • Travel
  • Salary
  • Tax & NI
  • Etc
  • Total Expenditure
  • Balance c/f

You’ll note that I have shown Tax and National Insurance in this spreadsheet, you could include them in your salary. I like to show them separately as this way I can see if I have accrued enough in time to pay the half yearly bills.

At the far right of the spreadsheet you will have your totals. These carry over from the month before but this end column is the sum of the income/expenditure from all the months.

As you can see a balance carries forward to the following month. This could be a positive or negative figure. Because this figure carries forward, any amendments made to the content of the spreadsheet will affect the whole sheet.

Challenge Seven

Today I want you to write your cash flow projection in Excel. You can download my template here.

• I want you to work out how much you will earn each month

• I want you to change your hourly rate or package rate and see how that affects the cash flow, is it better or worse

• Play around with the expenses and again see how this affects your cash flow

• Three months into your cash flow I want you to work out if you can buy a new laptop, is there enough profit in the business to do this? What happens if you wait until six months to buy it?

•  Now you have played with the cash flow I want you to revisit your rates – are they going to work or do you need to make adjustments, particularly on your package/retainer rates?

Want to know more? Get the 30 Day VA Challenge now:

30 Day Setting Up As A VA Challenge - eBook
With the 30 Day Setting up as a Virtual Assistant challenge author Helen Stothard will share her experience of running a successful business and help you over the pitfalls that many start up Virtual Assistant businesses encounter. Out now!
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