Cash flow calculator

This tool from TD Bank is handy for anyone who is thinking of starting a small business. It looks at setup costs and monthly expenses, and compares that to the amount of capital available to start the business.

Link to the tool click here



Step 1: Calculating your one-off setup costs

This step is especially relevant for those who are looking to start a business. Just enter your estimated one-off setup costs.

Link to tool.

Step 2: Calculating your monthly expenses

The next step is to estimate your recurring monthly expenses. These should be your fixed costs regardless of the revenue you make. Rent, wages, utilities and debt obligations are some typical expenses in this category.

Link to tool.

Step 3: Calculating your available capital

Next, you need to figure out if you have enough cash to start the business you have in mind. What are all the sources of capital available for you? It can be your savings, stocks you have that can be readily sold, a bank loan or cash you can borrow from family and friends.

Link to tool.


Result: Are you ready to start this venture?

Based on your inputs in the first 3 steps, the tool gives you a quick assessment of whether you can afford to start this venture. It will do that by asking you how much reserve you would like to have. Think of this as your safety net, which would allow you to stay afloat should your business stops generating any revenue.


If you don't have enough to start, consider trying to reduce the upfront costs or see if there is any other source of capital you can leverage. For example, you might consider postponing some marketing costs until the business is actually in operations, or structuring the bank debt so that the principal payback only starts in the second year.


Step 4: Calculating your revenue and direct costs

This is when you will input your estimated monthly revenue, as well as the direct costs corresponding to that revenue. Direct costs are variable costs that are driven by revenue, some example of which include hourly labor, raw materials or fuel. The tool simplifies it for you by asking you to input the % of direct costs to revenue. From there it will show you your net cash flow by month.

Link to tool.

Step 5: Exploring different ways to improve your cash flow

In this last step, the tool offers different ways for you to tweak your monthly cash flow. These ways fall into three different buckets: increase revenue (by increasing unit price or sales volume), decrease costs (by getting more efficient on fixed or variable costs), or increase your cash contribution (such as getting an additional bank loan if your business can service the debt).

Link to tool.

I hope this simple tool from TD Bank gives you a quick way to assess your business. Of course, all of this can be easily replicated by an Excel spreadsheet, where you can easily adjust the model to cater for specific needs of your business. Good luck!