Three cash flow cases worked by hand for Sevierville, TN businesses: parts deposits at an appliance repair company, a six-month forecast before a sewing machine purchase, and twelve weeks of a gift shop's receipts and payouts around a cash purchase.
Parts paid before the job is: deposits at a Sevier County, TN appliance repair company
An appliance repair company in Sevier County, TN that buys parts with its own cash and gets paid when the job is finished carries the whole parts bill in between.
Illustration only, invented figures: the company spends $2,400 a week on parts and collects 12 days after buying them on average. At any moment, about $4,114.29 of its cash sits in parts already installed but not yet paid for ($2,400 x 12 / 7, our arithmetic). Asking customers for a deposit covering half the parts when the job is scheduled cuts that to about $2,057.14.
What a customer deposit does not cover, such as a large job with special-order parts, is what a business line of credit is built for: draw it, then pay it down when the invoice is paid.
How to prepare a cash flow forecast, month by month, before a Sevierville, TN upholstery shop buys a long-arm sewing machine
The forecast begins with the money actually in the bank account, not with what the profit and loss statement says. An upholstery shop in Sevierville, TN thinking about a long-arm sewing machine can lay out six months before it asks for anything:
- Cash at the start: the actual bank balance on the first day.
- Receipts: customer payments in the month the money arrives, not the month the job is booked.
- Regular costs: rent, payroll, fabric, foam and utilities, in the month they are paid.
- The new payment, added to every month of the forecast.
- Cash at the end of the month, which carries into the next month.
- The thinnest month, where receipts barely cover costs.
Illustration only, invented figures: the machine and its frame cost $16,200, financed at 11.45% a year for 48 months, for a payment of $422.25 a month ($20,268.00 over four years, $4,068.00 of interest). In month 2 receipts beat regular costs by only $330, less than that payment, so cash dips that month and recovers after.
| Month | Cash at start | Receipts | Regular costs | Machine payment | Cash at end |
|---|---|---|---|---|---|
| Month 1 | $11,800.00 | $21,400 | $18,900 | $422.25 | $13,877.75 |
| Month 2 | $13,877.75 | $19,850 | $19,520 | $422.25 | $13,785.50 |
| Month 3 | $13,785.50 | $23,100 | $19,050 | $422.25 | $17,413.25 |
| Month 4 | $17,413.25 | $20,600 | $18,700 | $422.25 | $18,891.00 |
| Month 5 | $18,891.00 | $22,300 | $19,400 | $422.25 | $21,368.75 |
| Month 6 | $21,368.75 | $19,900 | $19,100 | $422.25 | $21,746.50 |
Cash ends month 6 at $21,746.50, so the payment fits in this invented case. If any month had ended below zero, that would point to a longer term or a smaller purchase before any request.
Can a Sevierville, TN gift and souvenir shop pay cash for an invented $2,860 camera kit in week 8? Twelve weeks of receipts and payouts
Weekly figures show how payroll weeks and rent weeks bunch up. A gift and souvenir shop in Sevierville, TN plans to pay cash for a $2,860 security camera kit in week 8 and wants to see whether that is safe.
Illustration only, invented figures: the shop starts with $9,400, pays $3,150 a week for stock and supplies, $4,380 of payroll every other week (weeks 2, 4, 6, 8, 10 and 12) and $3,600 of rent in weeks 1, 5 and 10 of this calendar. The camera kit lands in week 8, a payroll week.
| Week | Receipts | Paid out | Ending cash |
|---|---|---|---|
| Week 1 | $6,850 | $6,750 | $9,500.00 |
| Week 2 | $7,120 | $7,530 | $9,090.00 |
| Week 3 | $6,430 | $3,150 | $12,370.00 |
| Week 4 | $7,480 | $7,530 | $12,320.00 |
| Week 5 | $6,910 | $6,750 | $12,480.00 |
| Week 6 | $7,260 | $7,530 | $12,210.00 |
| Week 7 | $6,580 | $3,150 | $15,640.00 |
| Week 8 | $7,040 | $10,390 | $12,290.00 |
| Week 9 | $6,720 | $3,150 | $15,860.00 |
| Week 10 | $7,390 | $11,130 | $12,120.00 |
| Week 11 | $6,640 | $3,150 | $15,610.00 |
| Week 12 | $7,180 | $7,530 | $15,260.00 |
Cash bottoms out at the end of week 2, at $9,090.00, and ends week 12 at $15,260.00. The kit fits without borrowing in this invented case; if week 8 had gone below zero, moving the purchase one week or financing the kit as equipment would be the two choices to weigh.
Articles for Sevierville, TN owners: motel equipment, restaurant kitchens, working capital, shop stock, cash advances and food trucks
Articles on this blog take one cost at a time for a Sevierville, TN business and work it through with invented figures and Sevier County, TN Census counts. The articles so far:
- Floor care and vending machines for a motel, and who reviews the request
- A buffet line, a dish machine and new smallwares for a family restaurant
- How to get working capital: a frames order, two credit line draws and uneven months
- Printed shirts, size runs and a garment printer for gift and clothing shops
- What a merchant cash advance costs, day by day
- A food truck or a trailer beside a restaurant that already operates
Each article links to the funding pages it uses, and those pages link back to it.
By Boldwick Funding Group · Updated
