The Blues boss admits that the focus this winter remains on balancing a squad that saw 13 new faces arrive in the summer and six players join this time last year.
Cotterill also acknowledges that the situation is far from ideal but stresses that the club must deal in reality and work within the rules of Financial Fair Play.
"It's more outgoings at this moment in time if I am brutally honest, which is not necessarily how I want it to be," the 53-year-old told the Birmingham website.
"Like I have said before it's not an ideal situation being reactive in the transfer market, so I just have to get on with it.
"I have still got targets, people I would like to strengthen us - not only short-term but long-term as well. It's whether we can get to afford those - and all of that business. It's difficult to go into all that.
"As it stands at this moment in time I suppose I am more hopeful than confident."
Birmingham currently sit 23rd in the Championship table, two points from safety.