Cash flow statements typically piggyback on business plan and are incorporated into a finance section. Should an entrepreneur decide to forgo the business plan, a cash flow statement is still mandatory. A cash flow statement is a financial statement that breaks down the operating, investing and financial activities of the business.
The cash flow statement is broken down by month. It starts with all sources of income and then outlines the monthly expenses. The first month details all of the initial startup costs; i.e., furniture, construction build outs, website, indoor and outdoor signage, utilities, telephone, electrical, plumbing, painting, permits, licensing fees, and incorporation expenses. Each month thereafter will detail the anticipated regular monthly expenses; i.e., advertising expenses, rent, insurance, and payroll.