What are the Benefits of Doing a Business Projection?
May 08, 2019 by Roger Scherping
So, what are the benefits of doing a business projection? Why is it a good idea for you to do one?
Alan Lakein once said, “Planning is bringing the future into the present so that you can do something about it now.” So a business projection will help you see into the future, evaluate your decisions, and take action now -- because sooner is always better than later.
Here are some of the real benefits of a business projection:
* Planning helps you see your options (what-ifs) and determine your best direction. Rather than just winging it or shooting from the hip, you can lay out and examine different options to determine what makes the most sense for you.
* Planning helps you develop early warning of potential problems – a heads-up on future issues. It's always better to find out about problems before they happen and to take action as soon as possible to avoid them.
* Planning reduces risk by allowing you to react now to potential problems. You will reduce your risk of failure if you are aware of pitfalls that are ahead of you and take action immediately.
* Seeing potential outcomes helps you make better decisions. There's nothing like having options. Lay out different scenarios. Examine the risk and reward of each one. Determine what resources each one requires. Then make the best, informed decision that you can.
* Planning for growth is easier when you can project the possible outcome. Modeling what will happen will make growth happen smoothly instead of creating a crunch due to lack of resources.
* Business relationships improve when your cash flow is better and you can pay your vendors on time. Healthy cash flow is critical for a small business and makes everything run more smoothly.
* Planning saves time later – it’s better to deal with your problems earlier when they are smaller. Apply a small change or direction now to avoid a crisis later when things get out of hand.
* Best of all: planning is much cheaper than failing!
So, plan! At ProjectionSmart, we can help.