Charles Leikauf, a fractional CFO, shows small business owners how to read income statements and build 12-month cash flow forecasts. Numbers show what happened. Forecasts tell you what to do next, and how much money you'll make each month.
As a fractional CFO, it is your responsibility to help small business owners understand where their money is coming from. So how we do that is with a budget and a forecast. We predict how much money is going to come every month for the next 12 months, and we break it down based upon the categories. Revenue is the amount of sales that we get minus the cost of goods sold, service cost of revenue, whatever we want to call it. That's how much it costs us to do the thing. That leaves us with gross profit. After gross profit, we have selling, general, administrative, which is all the kind of other stuff that we can't directly attribute to the cost of the product. And then after that, we've got typical interest or amortization, depreciation, right? The other kind of things that are like non-core business that end up happening anyhow. And then that's left with how much money that we actually get to keep at the end of the day. And so when we look at that, right, if you're a fractional CFO walking someone through an income statement, helping them understand those things, not just what happened in the past, but watching what's going to happen in the future, not the next 30 days, but the 30 days after that and the 30 days after that until you can show someone every month for the next year how much money they're going to be making. We have tons of trainings called CFO Mastery that we can show you if you ever want to go through any of our details. That's what I highly recommend you get into if you need more help doing any of those things. I'm Charles Leikauf. I own Profit Search Group. I'll see you on the next one.
