So, how do you do a business projection? Business projections are an attempt to predict the future based on history and your insights. So you start with what happened in the past. You can get this information out of your accounting system. Assemble one year of monthly financial statements. This will be the basis for predicting the next 12 months. Next you need a budget. Figure out your planned sales, expenses, and profit for the next year. But a complete business projection also inc... [continue reading]
Welcome to the ProjectionSmart Blog!
We want to share with you our thoughts on business projections, cash management, small business, entrepreneurship, finance, startups, and business planning.
Some of you are wondering: What exactly is a business projection? A business projection is simply a financial plan for your business, usually for the next 12-24 months. For a startup, a business projection will tell you if your business concept makes financial sense. It will tell you whether you can expect to make profit with your concept and how much cash you will need to make it a reality. For an existing business, a business projection will tell you where you’re going to be in the nex... [continue reading]
So, what does a business projection include? A complete business projection includes three things: First, a budget. Most of you know what a budget is. It is your planned sales, expenses, and profit for the coming year. Second, a projected balance sheet. Your balance sheet is the list of what your company owns and owes and how much equity you have. So a projected balance sheet means what your balance sheet is going to look like in the coming year. Your projected balance sheet will show yo... [continue reading]
One semester I was teaching “Business Plan Development” to a group of students who were considering starting their own businesses. These students wanted to increase their odds of success, so they took the class to learn how to do business planning. To help them understand the numbers of their business, I had them use ProjectionSmart Startup. I told them, “Just enter your raw data into ProjectionSmart. Don’t worry about it for now. Just enter your best guesses and let ProjectionSmart do the analysis... [continue reading]
Some of you are wondering, Why should I do a business projection? A business projection is simply a financial plan for your business. I know a lot of you don’t even budget because you say, “My budget is going to be wrong anyway.” You’re right. It is going to be wrong. But that doesn’t matter. You still need to plan. Dwight Eisenhower, Commander of the Allied Forces in WWII, once said, “In preparing for battle I have always found that plans are useless, but planning is indispensable.” The real benef... [continue reading]
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