How to Build an Accurate 13-Week Cash Flow Model That Quickly Helps You Make Key Financial Decisions

“Is my business going to survive?”

With enough cash, it will.

When done wrong, building a 13-week cash flow model will leave you confused, worried, and unmotivated. And probably even cause you to throw in the towel too early. 

To build a great financial model, you must have clear intentions, reliable assumptions, and results that are readable by a 5th grader. Your historical reporting should be accurate to the penny to build trust. The underlying assumptions show you’ve done your homework. Your dashboard should be powerful enough to convince your investor(s) or business partners to take action. This is how you create a 13-week cash flow model that keeps you informed about your cash flow.

And yes, 1 hour a week reviewing your cash flow forecast can turn your goals into realities. 

You’re about to learn why the 13-week cash flow model is the most powerful* financial tool you will ever use in your business. 

*powerful due to speed, adaptability, and reliability – more on that later

You will also learn what sets the 13-week cash flow model apart from every other financial statement known to man.

If you get the big pieces right, you win big. 

You set yourself apart from the competition.

You get the freedom back in your week to focus on what moves the needle, not worried about cash flow.

As one client put it, you have the “Bible” for your business.

And your lender will be happy and say “you have a 13-week cash flow model? Impressive!”

If you use the formula we’ve mastered to create 38 cash flow models and counting, you get the holy grail of finance: a reliable tool to quickly know your numbers.

Because you don’t just build a financial model one time and move on.

You build a financial model that allows quick & easy decision-making.

But let’s start with two examples of where focusing on cash flow has helped make the business a TON of money. 

You’ve probably heard of them? 

What You Missed About Warren Buffet’s & Robert Kiyosaki’s Investment Strategy

Why does Warren Buffet have over $200 BILLION invested in companies like Apple and Coca-Cola?

Is it because he has a passion for iPhones and Cokes?

No.

Buffet knows that these companies have huge growth potential, and have positive cash flow, which, for Apple peaked at $111 BILLION in 2022.

And some of that cash flow from these investments will end up paying BILLIONS of dollars worth of dividends every year to the owner (i.e. stockholders).

Apple’s CEO, Tim Cook, may be responsible for keeping the company running, but Warren Buffet is definitely making more money!

What about Robert Kiyosaki?

His book ‘Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!’ has turned the term ‘cash flow’ into a household topic.

Robert was unheard of before this book, now everyone and their brother knows the importance of cash flow.

His perspectives on cash flow are so popular, that his YouTube channel has over 3 million subscribers.

Now, his opinions and insights are being picked up by MSN and Yahoo Finance.

He’s been on major podcasts like ‘Passive Real Estate Investing’ with Marco Santarelli, and even has his own podcast, ‘The Rich Dad Radio Show’.

Robert is even selling a board game, which teaches you about real estate investing and managing cash flow. 

Let’s talk about managing cash flow, which can be a daunting task for a small business owner or startup founder.

You’re talking about opening up a business bank account, setting up Quickbooks, hiring a bookkeeper, hiring a CFO, plus wearing all the other hats of the business.

And that’s just to survive.

With bookkeeping in place, you know where you’ve been.

Now, you must make decisions about where you’re going.

When you execute in the short term, the long term takes care of itself. 

Decisions about what to do with your cash become obvious. 

Once you start planning for scenarios and seeing the outcomes before they happen, your instincts will get sharper. 

It’s a vicious cycle. 

Say you run a beverage brand offering craft CBD drinks.

If you have a 13-week cash flow forecast and your competitors don’t, you stop worrying about every shipping delay or bad product batch. 

You start acting proactively. 

Your competitors can copy your distribution strategy, mimic your branding, and beat you on price.

But they will never compete with someone who knows their numbers and acts fast.

Why 13-Week Cash Flow Models Demand Instant Respect

Anyone can go to a banker or investor and say their business is the next big thing.

But you have 100 times more credibility when you can back it up with cold hard facts. 

Why?

Because most businesses can barely scrape together their financial statements, much less build a 13-week cash flow forecast to show where their business is headed. 

It’s the ultimate flex for anyone trying to borrow or raise money. 

It’s instant status. 

How could you not know your numbers when you’ve spent dozens of hours preparing financial statements, reviewing historical trends, and building a forecast?

You could find a basic template online and plot out 10% growth year over year in less than an hour. 

But you, and everyone else in the room, knows it’s bullsh*t.

And building a 13-week cash flow model is difficult, right? 

Yes. Building a 13-week cash flow model is hard…until you hear the dirty little secret that everyone in corporate finance knows but no one talks about. 

Most 13-week cash flow models are built in Excel. 

In fact, unless it’s a business in the financial industry itself (think JP Morgan), the largest businesses in the world manage their cash in Excel. 

Because most people in finance realize it’s the best tool for the job. 

So they find people who are experts in their domain to make the process of building and maintaining the model fast and easy. 

More about that later. 

What Questions Should Your 13-Week Cash Flow Forecast Be Helping You Answer?

The goal of your 13-week cash flow model is to make you a better decision-maker.

You want to look at your 13-week cash flow forecast and be able to quickly answer questions like:

  • Can I make payroll this week?
  • How long until I need to buy more inventory?
  • Do I need to borrow more money from my bank or investor? 
  • Are we on target with our projections?

So how do you answer these questions?

You identify the biggest impact on your cash flow and make it the focal point. 

Your 13-week cash flow forecast is a mix between:

  • Financial assumptions 
  • Non-financial metrics 

That’s why finding the biggest impact on cash flow is so important. 

Without it, you don’t know what levers to pull to increase your cash flow.

The good news is that cash flow is predictable in the short term. This is why the 13-week cash flow forecast is so powerful. 

And once you have the framework put in place…

Meet Your Sidekick, Business Partner, and “What If” Planner All-in-One

We work with business owners who have complex cash flow management needs. No one else. 

You don’t have to do 9 figures a year but you must have some cash flow questions. 

That’s how we know your business could benefit from a 13-week cash flow forecast.

Because we build cash flow forecasts to multiply the decision-making speed of the owners we work with.

All of my clients have bookkeeping, clean records, processes and procedures in place, and a general idea of where their business is headed.

So if they are stressed on a daily basis about cash, we will check in weekly or even monthly to see how cash flow is doing. 

The 13-week cash flow models we build are lightweight, integrated Excel files that adapt and evolve with you. They are never fixed or stagnant. 

The lie that software companies tell you is that they can automate your cash flow forecasting entirely. 

The real way it’s done is by using Excel and then focusing on scenario planning. 

Your 13-week cash flow forecast is the guiding lamp of your business in the dark, cold world of entrepreneurship. 

What would you rather do?

  • Option 1: Wake up every morning worried about the bank balance
  • Option 2: Focus on your business and have a cash flow game plan each week

You’d choose the latter, of course. 

Because that is less stressful.

The business needs you in the driver’s seat making proactive decisions. Those decisions can be made in confidence when you’ve done your homework. 

Your competitors are frantically trying to make payroll.

The magic of the 13-week cash flow model is that it’s custom to your business.

Nothing beats getting to the office on Monday and having all the info at your fingertips. 

Let’s talk about those two options one more time:

  • Option 1: Every morning you wake up worried
  • Option 2: Every Monday you are prepared 

Option 2 gives you a 100 times more likely chance of success.

Option 2 helps you see the outcome of a decision without having to learn the hard way. 

You want less stress (Option 1) and more confidence (Option 2):

This is why people hire us to build their 13-week cash flow model.

13-week cash flow models give you a game plan each week to make decisions based on data.

This relates to a major challenge plaguing my clients: not enough time.

Owners, CFOs, lenders, advisors, and other staff say it takes too much time and effort to build and maintain these models. 

Reviewing historical data and building the first draft run from 20 hours for a small business to nearly 100+ hours for a large corporation.

Remember, those are estimates. Building certain 13-week cash flow forecasts can take hundreds of hours or more.

And every business out there can benefit from a 13-week cash flow model.

Coca-Cola and Apple use 13-week cash flow models to run their finance operations and stay on top of cash flow. This is how they know how much and when to invest extra cash.

So why doesn’t every business take advantage of this?

Because most business owners don’t even know about 13-week cash flow models. 

Plus, even if they did, they’ve never built one before and fall for the tricks and tactics software companies use to convince them that it can be automated with one click.

On top of misleading software advertisements, most CFOs have only built one, maybe two cash flow models in their entire career. 

The result: an ineffective model that isn’t reliable. 

But what if your business is profitable enough to not need a 13-week cash flow forecast?

You’re still doing something to manage cash flow.

You’re logging into the bank. Then running the math in your head. You’re constantly evaluating new scenarios. You’re keeping track of all your bills in a calendar or notepad. 

All of that takes time and energy. 

This is why the smart business owner lets an experienced professional do the upfront work of setting up the 13-week cash flow model, which can then be used forever as the company grows and evolves.

And the experienced professional is important to the process…

The Best 13-Week Cash Flow Forecasts Leverage Excel to Be the Ultimate Source of Truth for Decision Making

Excel is the most widely used software application in the world by business and finance professionals. 

Microsoft says that over 1.1 billion people use their productivity services. With new features like being able to use Python in Excel coming in the near future, it’s going to get harder for software applications to compete. 

So while your competitors spend six months trying to learn a new software that claims to automate their forecasting – you are miles ahead. 

Because you piggyback on Excel’s reliability.

Second, Excel’s flexibility gives you room to adjust as your business changes, assuming it’s updated correctly. 

Now you are making decisions based on accurate and current assumptions while you run the business.

You want to open up your 13-week cash flow model and immediately say, “Okay, I know what to do.”

Yes, it can be that simple.

Should You Hire A CFO Full-Time?

Bringing on a full-time CFO sounds glamorous and exciting. 

But even if you have the money to hire one, finding the right CFO is tough and takes time.

If you find one at all, you’re lucky if you get a positive ROI after the first year. 

Getting a positive return could take years.

Some CFOs bounce around from company to company. 

You think you’re with a veteran CFO…only to realize why they haven’t kept a role for more than 18 months. 

And since the hiring and interviewing process takes so long, expect to be even more confused about which choice to make. You will spend time interviewing dozens of candidates. 

The best way to work with a veteran CFO is to have your own financial models and prove two things:

  1. You have accurate and timely reporting
  2. Do you know what metrics move the needle (i.e. cash flow)

Do that, and you won’t have to look for a CFO.

They’ll find you, and you’ll have massive leverage in negotiations. 

But if you are doing well on your own, you’ll reject the CFO offers because it’s so much more profitable and satisfying to own the entire process. 

And oh yeah, if you think big-time CFOs will come in and make you profitable in 6 months, think again. 

Read this opinion from John Touey, executive search expert:

“…in my experience, there is one divide that very few seem to successfully bridge: the transition from a large company to a small one.”

John Touey

And let me ask you a question: Can you tell me who Apple’s CFO is? Or Disney? What about Johnson & Johnson? Or Exxon? Or Coca-Cola? 

No. 

You don’t invest in a business because of the CFO.

You invest in a business because of its ability to produce cash flow. 

Now I’m going to show you what makes a business produce high cash flow. 

What Makes a 13-Week Cash Flow Forecast Work When You Don’t Have a CFO or Excel Experience

After building 38 custom 13-week cash flow forecasts (and counting) across industries like food & beverage, manufacturing, transportation, healthcare, and even IMAX movie theaters, we know what works.

First things first: the forecast must be simple to understand.

Not everyone knows how to take complex financial models and make them simple to understand.

But you know when you open up an Excel file and it feels overwhelming. The formatting is confusing, there are dozens of tabs, the formulas look like a foreign language, and there is no clear summary. 

If your forecast feels complex and unclear, it gets ignored. Or, if you’re lucky, reviewed once a year. Or, when sh*t hits the fan. Sad, but true. 

Your design must be intuitive without sacrificing nuance. And it can’t feel like there is no logic to the color or formatting of cells. 

Your summary lets you make a decision like it’s obvious. Your ability to see a path forward must be instant, within seconds. 

When you nail the design and summary, those critical business decisions can be made with clarity. 

Once your forecast has been updated and reviewed a few times, the entire weekly process can be done in 15 minutes. 

What about assumptions?

By most financial standards, assumptions are the backbone to every good forecast. 

But as a small team, you must focus on the high-impact assumptions only. 

We worked with one client in the specialty food distribution business on their 13-week cash flow forecast. 

Why does this forecast work? 

The main focus is on revenue because in this low-margin business, the fight for revenue is the only thing that matters. 

The ability to generate revenue has downstream effects on the cash flow and what is available to spend, but without sales the business is dead. 

Funny, the thing is, the most crucial aspect of every forecast is to get the sales forecast right! 

I’ll talk about some of my other successful clients later on. 

Does A Forecast Have to Be Accurate to Be Useful?

Yes, your forecast must be accurate. 

Sounds obvious, but people bring this up all the time. 

Everyone involved in the business should have confidence in the forecast. 

You must prove that the model is accurate by measuring variances (i.e. comparing forecast to actuals).

Your forecast also must show the variances clearly and concisely. It must provide enough detail to help you understand where the forecast was missed, but without having to go check the bank statement to confirm. 

Striking this balance is key because that’s what gives you the ability to only spend 15 minutes reviewing the forecast each week.

How to Not Build a 13-Week Cash Flow Forecast

We started this article on this sour note: 

“When done wrong, building a 13-week cash flow model will leave you confused, worried, and unmotivated. And probably even cause you to throw in the towel too early.”

So what do we mean by “wrong”?

Let’s go through all the ways building your own forecast will turn into a disaster:

  1. The DIY Method with an Online Template

Business owners tend to be super smart and advanced in their fields. They have the curse of knowing too much. 

So they sit down, search for a template online, and start plugging numbers in for every line item they can think of.

This DIY method is an effective approach…but only if it’s done in a structured way. 

Otherwise, you get a model with a ton of info before you realize you don’t know what to make of it. 

That’s when you give up, or do what you should have done at the start: hire a pro to get the job done right.

By the way, if your DIY forecast is chaotic enough, most pros will say no to the job. 

Fixing a bad forecast takes twice as long as building a good forecast from scratch. 

Building a forecast is like plumbing. 

You might get lucky doing it yourself.

But when it’s time to meet with a new investor and you can’t answer their questions about your forecast, you’ll say “ I should have called the pros the first time.”

  1. Engaging a CFO Who’s Never Done It Before

You put up an ad on LinkedIn or ZipRecruiter to find a CFO. 

Because all CFOs do the same thing, Right?

Wrong. 

Hiring a CFO is a huge undertaking – even for multi-billion global organizations.

Be warned. 

Some CFOs will be excited to work for you, which will make you happy…at first. 

Up until about 6 months in. 

That’s when they realize they’re way over their heads, and they’re afraid to tell you. 

This never ends well. 

  1. You Hire An Overseas Upwork Freelancer

Want inside info on some “Top Rated” freelancers on Upwork?

They can engineer a complex forecast for you….at a cost of about $500 per hour.

How much of that goes towards producing your forecast?

$50/hr – to another hourly subcontractor on Upwork that whips up forecasts like their $5 Subway sandwiches. 

In the worst-case scenario, that $50/hour subcontractor turns around and farms out your book a second time to a $10/hr financial analyst on Fiverr.

The rest of your money goes to pay for all the marketing and promotion to get you to see that “Top Rated” freelancer.

So you think you’re hiring a credible consultant who has created multiple forecasts for complex businesses.

But you’re really just working with someone who is really good at marketing themselves on Upwork. 

Now, I’m about to teach you the smart way to get your 13-week cash flow model built, but before that, you should know about….

The Extra Hidden Benefits of 13-Week Cash Flow Forecast

You know that your forecast helps you quickly make more informed decisions. 

But your forecast has a major hidden benefit. 

It’s the foundation for a powerful scenario-planning tool.

You can rework your forecast to run scenarios for:

  • Hiring new employees
  • Launching a new product or service line
  • A new bank loan
  • Seed money from new investors 
  • Buying real estate or equipment

This saves you hundreds of hours of analysis when these situations arise. 

Because your forecast has been battle-tested for months and already reflects your current reality. 

A 13-week cash flow forecast is also the ultimate pitch deck. 

Want to make a great first impression on a new lender or investor prospect?

Send them your professionally-designed 13-week forecast with its clean and intuitive summary. 

Want to know if you can hire more employees? Run that scenario in your forecast. Verified forecasts beat back of the napkin math, guaranteed. 

Before we close out, you must think about measuring the success of your forecast. 

How to Measure the Success of Your 13-Week Cash Flow Forecast

What would you rather have? 

  • $50,000 in funding, only 40% of your company,  and the constant worry of running out of cash
  • $0 in funding plus the peace of mind that you can bootstrap your company and keep 100% ownership 

It’s an extreme example. 

But you get where I’m going. 

You measure your forecast success by how accurate it is and your ability to communicate where your business is going to other executives, lenders, and investors. 

Remember what we told you before: 

“Your 13-week cash flow forecast is the guiding lamp of your business in the dark, cold world of entrepreneurship.”

For example, here are some insights learned from previous clients:

  • Gym owner realizes she can now take home a paycheck after seeing how profitable the next 3 months will be
  • Water recreation company must borrow $20k over the next 3 months until summer revenue picks up
  • Juice bar must increase revenue by 433% or will run out of cash in 7 weeks

We can share even more examples of cash flow forecasts helping business owners make more informed decisions if we talk. 

That’s my specialty, and if you are ready to have a scenario-planning tool for your business, listen up.

How Clarity Cash Flow Makes the Cash Flow Forecasting Process Easy While Saving You Time and Money

We do one thing: build 13-week cash flow forecasts for business owners and startups. 

Our first mission is to help you plan for short-term cash flow needs.

Our second mission is to get your financial story into a format that is clear and provides others with the best information possible. 

We don’t pawn you off on an Upwork freelancer. 

You work with veteran professionals with 38 cash flow forecasts under our belts (and more by the time you read this).

We’ll connect one-on-one to identify your cash flow needs and ensure your forecast is accurate, reliable, and clear. 

You bring the scenario, and we make sure the analysis is sound and reliable. 

We’ll also give your forecast a special treatment that online freelancers don’t understand. 

Your forecast is a living document that evolves as your business grows. (We can talk about this further in a consultation)

Your forecast is something that doesn’t need the attention of a full-time professional. That’s where the magic happens, and it’s where online freelancers fail. They don’t understand how to create a model that you can maintain. 

And best of all, we make the process as quick and easy as possible. You do not have to spend 6 months and $100,000 on a CFO to get your financial projections done. Not even close. 

Our process is many times faster than online consultants because we have an exact blueprint for going from a scenario to a finished forecast. That comes from building dozens and dozens of forecasts with all different kinds of businesses from all around the world.

Do not underestimate the impact of time on your stress and frustration levels. Nothing is more stressful than knowing months have passed and you’re not even close to understanding your numbers.

Plus, we’ll give you everything you need to provide presentation-ready financial projections and summary documents to any lender or investor who wants to invest in your business. We can even help you find lenders and investors for your business. 

And if you’re worried about things like:

  • Market trend research
  • Financial analysis 
  • Excel best practices 
  • Building a cash flow summary
  • Identify key metrics 
  • File maintenance 
  • Deciding on the best assumptions to use

Stop!

Our team takes care of every detail you can imagine (and the ones you can’t), just as we’ve been doing for over a decade. 

Again, you bring us your business situation. 

We turn it into a 13-week cash flow forecast that is ready to be used for decision-making. 

You get the Excel file, PDF versions, and all the support documents used to build the model. 

You keep 100% of the files and ownership of the forecast. No strings attached – they’re yours forever.

If you’re ready to learn about the process of having accurate cash flow projections for your business, contact us using the link below. 

As a reminder, we only work with business owners and startups that don’t have a CFO or finance person on their team (we love bookkeepers!). You don’t need to have all your documents perfect. But you must have a need to hire a 3rd party to help you with this work. 

Because we build one type of financial model: the type that helps you make short-term business decisions. We want to make decision-making a breeze. So set up a consultation right now if you’d like to hear about the possibilities. 

If you’re still reading this, let us say thank you.

You’ve given us a good chunk of your time and we appreciate it. 

And we hope you learned a few things about what it takes to build your 13-week cash flow forecast, and the biggest pitfalls to avoid. 

Good luck out there.

-Clarity Cash Flow team

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About the author

Clarity Cash Flow is an online resources with a mission to provide business operations with the best cash forecasting and treasury management information available on the internet.

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