Today let’s talk about forecasting your fixed costs.
Do it annually.
Do it quarterly.
Do it monthly.
At first, you might even do it weekly.
This is the easiest one to do, and the easiest one to change. Look at your regular expenses. See what you spend every month on things that don’t really change (utilities, rent, health insurance for employees). That’s your fixed costs.
Take a couple of months to figure out if you are doing this accurately before you start to work to change things. There are annual expenses that exist that you forget about until they are due. Kind of like, in your personal finances, buying tires. You know you have to, but you don’t always think about the cost of replacing your tires on a mile by mile basis.
This can also have a huge impact on your cash flow. Accurately forecasting these fixed costs can create the real stability you need in your business to get your sea legs. Practice, practice, practice.
This will be the easiest curve you’ve ever flattened.