Do you know where your money’s going in your Shopify store? If not, you probably should.

Many small businesses struggle with limited or inconsistent cash flow. According to US Bank, 82% of small businesses fail because of cash flow issues.

Cash flow is crucial to business success. And that’s why it’s also a source of tremendous growth power.

With a positive cash flow, you can settle debts, reinvest in growth, and hedge against financial challenges in the future.

If you want to escape the “reinvesting-all-of-your-profits” hamster wheel, then check out today’s Deep Dive.

Together we’re going to walk through the 4 “trampoline” steps to catapult your Shopify store’s profitability.

Let’s dive in!

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Boost Your Shopify Store’s Profit:
A Cash Flow Guide

Cash flows through a business. Money comes in, money goes out.

We want more coming in than going out, right?

Let's learn how.

First, we need a map 🗺️

Shopify's cash flow calculator is our map (shown above). It’s a simple spreadsheet that shows us where our money goes. But you can follow this process with any basic income & expenses spreadsheet.

We can plan for a day, a week, or a month. It's up to you. But remember, the further out we look, the fuzzier it gets. So, let's stick to four to six weeks.

Now, let's dive into the steps.

Step 1:
Know Where Your Money’s Going

First, we list all our costs. Rent, salaries, ads, software costs, fulfillment costs, loan payments, everything.

Write down what it's for, how much, and when it's due.

Check your bank and card statements too. Don't want to miss any sneaky expenses!

Step 2:
Predict Your Sales

Next, we guess our sales. This can be tricky. But don't worry, we can use past data to help.

Look at your sales from the same time last year. This can be more accurate than last week's sales. Also consider any holidays or events coming up that can impact sales.

And be careful not to be too hopeful. Remember, finances affect all of your business. You don’t want inaccurate accounting to make you order too much inventory.

Step 3:
Build Your Money Map

Now, we fill in our map. Shopify has a free cash flow Google Sheet for this.

Add a row for each cost and each sale. If you sell on different channels, like web, retail, and trade shows, make a line for each. It's easier to predict that way.

Add your sales data for each week. Fill in your costs too. Some are weekly, some bi-weekly, some monthly, some change.

Don't forget the little costs that pop up. Use the "Other" row for these.

Step 4:
Keep Your Map Fresh

Your cash flow map is alive. It changes. Update it once a week. 

If your closing cash doesn't match your guess, find out why. Maybe you forgot a cost. Or maybe you were too hopeful with your sales.

Always try to have four to six weeks planned.

If you're running low on cash, the “Closing Cash” tab in the spreadsheet will turn red. This means you need to make some changes.

These steps might seem simple (maybe a bit too simple to have a real impact). But tracking cash flow is where the 82% of small businesses fail.

Building a finance tracking habit is a small act, but it’s incredibly powerful for the profitability of your business.

Following the steps above weekly will create a compound effect. The financial rewards from catching losses and capitalizing on profits can return thousands, even tens of thousands of dollars in years to come.

So keep counting you beans!

P.S. Give your business a 5-min financial health check with Shopify’s free cash flow calculator.

P.P.S. When you give your rating for this newsletter below, let us know how we can tailor the next issues to your preferences. Thank you!

The Early Checkout Team

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