“You cannot change your destination overnight but you can change your direction overnight.”
Jim Rohn, US Motivational Speaker
There are 3 critical turning points to note in forecasting the revenue. The first turning point is when the business starts to make a profit as can be seen in the profit and loss accounts. This can come after 12 months or slightly longer but must not be too long.
The second turning point is when the cash balance turns positive for the first time. This may happen from month 24 or longer but must not exceed 36 months. There are exceptions to the 36 month cutoff such as a substantial investment in an oil refinery. For this app, the cash balance must turn positive by month 36.
The third turning point is when the cash balance is most negative. This figure is essential to work out the amount of investment needed for your business venture.
Key Turning Points