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Small business cash flow forecasting for cafés

A café can be profitable on paper and still run out of cash, because of a quiet January, a VAT bill or a broken coffee machine. A cash flow forecast shows the problem weeks before it reaches the bank.

Profit isn't cash

Profit is sales minus costs over a period. Cash flow is when money actually lands and leaves. VAT, quarterly rent, annual insurance and loan repayments can all hit cash in a single week.

Build a 13-week forecast

1. Opening balance: today's bank balance.
2. Cash in, week by week: expected takings (use the same weeks last year and adjust for weather, holidays and local events), card settlement delays, catering orders.
3. Cash out: wages and employer PRSI/NI, suppliers (on their payment terms), rent, utilities, VAT returns, loan repayments, card fees, repairs.
4. Closing balance = opening + in − out. It becomes next week's opening.

Café-specific tips

• Forecast takings by day of week. Saturdays and wet Mondays look very different.
• Your staff rota is your biggest controllable cost, so tie it to forecast sales.
• Put VAT aside in a separate account every week.
• Keep a minimum cash buffer line, and colour any week below it red.

Review weekly: forecast vs actual

Every Monday, replace last week's forecast with the actual figures and roll the forecast on a week. After a couple of months you'll be surprisingly accurate.

If a red week appears

Act early. Agree supplier terms, delay non-essential spending, run a promotion in quiet weeks, or talk to your bank before you need the money. Enterprise Ireland and your Local Enterprise Office (Ireland) or the British Business Bank (UK) have free guidance.

Not financial advice. These guides are general information for budgeting and planning, not financial, tax, legal or mortgage advice. Rules change and your situation is unique. Check official sources or a qualified adviser before you act.