Preparing a forecast for your business plan
Creating financial projections for your startup is both an art and a science. Financial forecasts use existing or estimated financial data to forecast your business’s future income and expenses. The forecast can feel daunting for entrepreneurs, but don't worry - all you need to do here is make some reasonable estimates, based on your own expertise and research. It's also a great idea to track down some similar businesses so you can base your data on that benchmark.
Forecasts often include different scenarios so you can see how changes to one aspect of your finances (such as higher sales or lower operating expenses) might affect your profitability. But remember, forecasting is not about being 100% accurate. The job of a forecast is to help you visualize the potential needs of your new business ahead of time, so you can make sure you'll have adequate financial resources in place. Every business owner is qualified to forecast revenue — all you need is common sense, the ability to research the factors, and the motivation to make an educated guess.
The articles below will show you how to complete each section of the Upmetrics financial plan, as well as how to understand the standard financial statements that are automatically created from your forecast.