How to forecast cash flow for 90 days

Hey everyone, today I wanted to be practical, like show you an actual practical tool. So I'm going to share my screen with you. One of the struggles that, uh, our gym owner friends have is forecasting their cash flow, uh, whether it's for 30, 60, or 90 days. When the pandemic happened of COVID we created a 13-week cash flow tool, and we spent a lot of time talking about it then, but we've kind of I don't know, we've been talking about other stuff, but I wanted to come back to that because this 13-week cash flow tool can be really valuable. So, um, let me share with you what it looks like. This is a Google template. Um, feel free to make a comment below and, uh, say you would like this template and we can get you a link to this Google Drive. It's free. What I've done already is I've typed in information for a gym For, uh, the last 4 weeks. So if you notice, I'm actually, just to make it simpler, starting with 4 weeks ago, uh, because I already have that data and it's the easiest way to show you how to utilize this tool. So I'm gonna put in the date of the week that starts here. So I did April 4th, 2021. The rest of the dates automatically populate. And I'm also putting in the bank balance for the same date. I now look at my books, and if you're using QuickBooks, for example, you can run, run a report. It's a profit and loss report, and you can say display columns by week. And so that's what I did, and that gave me how much revenue this gym makes weekly. This particular gym invoices every week. Their billing cycle is weekly, which made it really helpful. If your billing cycle is a different— maybe it's twice a month or once a month— you're going to put the deposits just in the weeks that it happens. Then I put in the expenses that the gym has or has had over the last 4 weeks. We can see there's an accounting expense that happens on the first week of the month. There's some advertising stuff, bank charges, rent comes out the second week of the month, uh, software. There, the team member, when their payroll happens, happens every other week, it looks like. And then, uh, their training programs like HSN and 2Brain. Maybe the gym has Factory Forge or WTF or whatever mentoring program. Those training certification things go here and then some utility expenses. So now that I have 4 weeks of real data, it makes it easy for me to then forecast out the rest because now we're just going to basically duplicate and see what's going on here. So that's the first step. To be simple, I've done the calculations and even if I look at these 4 numbers here, And I come down here to this bottom box in Google and I put— oh, looks like the average is $1,832. So, I'm going to be conservative and just say the weekly income is $1,800. So, I'm going to put $1,800 in the rest of these columns because every week on average, that is what would be expected. Okay, the first of the month there's a $75 charge for bookkeeping, so I'm going to go through and on the first week of every month I put $75. Looks like they started some advertising, and I, I know that they did, so we're gonna go ahead and put $50 of advertising a week, uh, is what this gym is gonna be spending. Bank charges, looks like the beginning of the month they have— that's when their merchant processing fees come out, so Uh, we'll put $13 there, and I can tell you the reason that's so low is because they have most of their clients on ACH autopay. The only credit cards they do is probably for retail sales, um, like supplements and things. Looks like rent comes out, uh, around the 10th of every month, and it's $4,346, so I'm going to round up to $4,350. And, uh, so I'm gonna put $350 here on this week. And I'm literally just walking you through the steps, uh, so that you can see how to do this. Um, I have an example of this where I go into a lot more detail, um, but it's also a gym that's a little bit more complicated than this one that I'm looking at. Okay, first of the month, it looks like there's a software subscription for $278. Um, but I just wanted to show you that you could easily do this yourself. I mean, it looks like the last of the month there is a charge for $49. Um, I, I'm literally— I just took the real data from the last 4 weeks, and now the next step that I'm doing is I'm putting that exact data in, uh, for the future, for the future next, uh, 60 days. Okay, so it looks like every 2 weeks, so I'm gonna put $3,400 in 2 weeks, every 2 weeks. Okay, and then looks like the first of the month there's $598 that goes out, uh, in Hiring people to try to help them be better. And then utilities, looks like there's about 3 weeks, uh, starting with the first of the week. I'm just gonna go— I'm gonna put the exact same numbers. Okay, so that was the second— that's the step that— I'm not doing a good job of numbering these, but that's the next step. You completed it. Now, because I put the beginning bank balance in and I've put all these numbers out, I put my income in. Oh, please note, I did add this in. I noticed about every 3rd month the gym has a purchase of some of the retail items like FitAid. And so I already put that in. And then with the other expenses, it now shows me that, okay, Based on the current trajectory of this gym, the bank— the business is going to be negative. In fact, it is negative every single week. Um, looks like this week it became positive, like it was positive cash flow. Um, there's a few weeks, but in general, you know, uh, this gym is going to need to figure out how to cover up— cover a $14,000, $15,000 shortfall. And that's where then your creativity and how you run your business comes into play. This is by the end of June. Now we could shift all these over and add in another month if we wanted. The sky's the limit on what you want to do with this. But the reality is, if this were your gym, what, what decisions would you take or make to figure out how to get the $15,000 in cash. Is there an event that you can put on and maybe run it in the beginning of June that could help bulk this up? Hopefully these fit— this $50 a week in Facebook advertising is going to increase the actual $1,800 here. Will that increase sufficiently to cover $14,000, $15,000? I don't know. Um, I can— I mean, if this were your gym, you would look at expenses and say, man, how do we get this expense— how do we get our expenses down? I can tell you with this gym, they have cut expenses as far as they can go. Their problem is getting leads and getting revenue. Um, but, uh, certainly maybe need to readjust class times. Maybe they can cut back on a class. Maybe there's some classes that just don't have enough participation to justify, like maybe your Tuesday and Thursday classes. That could be an option. And you could look at this $598 of mentors that they're paying. Look, it's $500, it's like $600 a month. They're $15,000 short. So even if you cut back on that expense, you're not even close to touching the shortfall. So in this gym's case, the big problem is revenue. And so the owners are going to need to be prepared to put in this type of cash to keep it open, and hopefully their advertisement efforts are going to work out. So I just wanted to show that with you, uh, real briefly. 13-week cash flow— you can comment below and a team member will get you a link to this template if you want to use it. Hopefully my simple walkthrough is an easy way for you guys to see how you could do this yourself, and hopefully your results are a little bit more optimistic than looking at and seeing that you're going to be $15,000 short in a couple months. So that's what I got for you today, just a practical tool that we like to use. And it, again, it's really good because now at least 2 months out I can see Uh, there are some decisions I would need to be making right now, and those decisions will make my gym better in the long run. All right, remember, profitability is a choice. Have the courage and wisdom to choose it.