Three Important Business Forecasting Tips

Proper financial forecasts will help you develop operational and staffing plans, hone down the most effective business model and make your company look more attractive to investors.

Here are 3 primary points you should ponder when forecasting your business for ultimate growth that should be revisited monthly, quarterly, and yearly for maximum sufficiency in conjunction with your business plan.

1. Itemize fixed and variable costs plus overhead expenses first. Start with expenses, not revenues while leaving ‘padding’ for the costs of labor, licensing fees, insurance, legal expenses, marketing and advertising
2. Create two sets of forecasts: conservative (think smart) and ambitious (think big).
3. Understand the ratios that reconcile revenue and expense projections:

Gross margin = Total Direct Costs compared to Total Revenues

Operating profit margin = Total Operating Costs compared to Total Revenue (-financial costs)

Total accounts in comparison to each employee

For more details on growth forecasting for your startup or existing business, I am facilitating consultations to discuss your specific needs.

Schedule your free consultation for you and your team at JeffreyLevine.Solutions today.