Page 8 - Beverage Master December January 2020
P. 8
Craft Beverage
• Encourages a collaborative working environ- How much will I expect my revenue and expenses
ment between operations personnel, manage- to increase?
ment and owners.
Will I need to tap into my line of credit or find
• Fosters “bigger picture” thinking. additional financing as I start up?
• Enables you to run different scenarios such as: Next You Will Need To:
a. Impact of cash collection practices and • Obtain historical revenues, expenses and cash
terms (when and how) flow for last two to three years.
b. Impact of accounts payable terms and dis-
counts (when and how) • Develop a template to forecast one year into
c. Cash flow for an event the future.
d. Adding a new revenue source
e. Leasing or building a new brewery or tap- • Review historical growth and forecast growth
room based on discussions with management.
f. Debt restructuring
• Prepare a formal report outlining the significant
• Can ease the burden of sudden and significant assumptions and the forecast results.
changes.
a. Key assumptions
The first step to creating a cash flow projection b. Increase operating revenue
is to define your approach and assumptions. For c. Increase operating expenses
example, you may want to evaluate the financial d. Capital additions: production or brewing
impact of adding a new seasonal brew. A few key equipment, delivery trucks
questions to ask are: e. Debt service / borrowings
6 December - January 2020 BEVERAGE MASTER
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