First – I think people freeze when creating a forecast because they think the forecast has to be 100% correct or they don’t know where to start – in reality I would start by trying to do the exercise in 30 minutes, take a break for a day and then come back and dive into each area. Read more about how to create a financial projections when you don’t know where to start[…]
When people are creating a new forecast for a company that is just starting they sometimes freeze up because they do not know what values to assign to certain assumptions because the business is new. If the business has started you should use actuals and the trend. If it has not then I would recommend Read more about How to create a sensitivity analysis[…]
The number one mistake I see with forecasts is that people create a forecast that just increases revenue by X percent each month. Here are the reasons why this is bad – It is hard to explain your business to investors. The first question they will want to know is how you will grow your business Read more about How to create a driver based sales forecast[…]
Financial forecasting helps companies plan and understand their business better. When you understand your business you can invest the correct amount in the right areas so that your business can continue to grow without running into cash issues. Running your business without a forecast is like going to the airport without a flight booked – Read more about Why Financial Forecasting Matters[…]
At Finance Pals we specialize in creating detailed forecasts based on key drivers such as number of new customers and revenue / costs per new customer or profit margin. Here are our 5 steps for how to create a financial forecast. Get your actual expenses and revenue updated. You can do this in excel or Read more about How to create a financial forecast[…]