# NTD 2022 ISSUE 3 DE-3 - Page 21

##### Step 4
space , etc ., so this step is estimating the monthly recurring expenses as well as any additional first-year expenses that the loan may not have covered . In the example , you can see that most expenses are equal each month , but advertising has a large expense in the first month since the loan didn ’ t cover the upfront advertising expenses . You ’ ll also want to include the loan payments to get the total amount of cash going out the door . If unsure , choose higher numbers on this step .
being (\$ 15,845 ). Do that for all 12 months ( or 24 + if you want to look at more months ). Then , go back and calculate the sum of the months through each month . So , through month two , the shortfall is (\$ 71,675 ), and for the twelve months , it is (\$ 125,630 ).

#### Step 3

Calculate your monthly shortfall and then calculate your cumulative shortfall . Using the example , you would look at month one and take the collections , minus the total expenses , minus the loan payments . That would give a net outgoing cash flow for the month (\$ 55,830 ) in the example , with month two

#### Step 4

Determine how you will cover the shortfall . The two most common methods to cover the shortfall are through some working capital from the loan and by continuing with some associate work until you are making enough to work full time in your practice .
Let ’ s look at the twelve-month cumulative shortfall of \$ 125,630 and see how you might cover that . Let ’ s say you make \$ 9,000
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