We have helped a few clients prepare Cash Flows in the purchase of a Franchise. Wisely, many Franchisors insist that prospective franchisees complete a Cash Flow forecast for their franchise before any approval is granted. Given that many buyers of franchises are purchasing a business for the first time, many do not have a complete understanding that their total cash flow is going to vary from week to week and not directly in proportion to income levels. For example, a higher week of income may result in high staffing and other expenses, which in some cases can result in lower cash inflow.
Whilst no one can predict the future, planning with the use of a Cash Flow forecast can help minimise the consequences of unexpected expenses and cash flow issues