FINANCIAL FORECASTING, A VITAL PART OF BUSINESS PLANNING

This is always a busy time of year for me. As well as completing my own annual business review and preparing my financial forecasts for 2018, I’ve been helping my clients with their 2018 financial forecasts so that they can continue to grow their businesses.

FINANCIAL FORECASTING, A VITAL PART OF BUSINESS PLANNING

Financial forecasting is a vital part of business planning. A financial forecast is simply a financial plan or budget for your business. It is an estimate of two essential future financial outcomes for a business – your projected income and your expenses.

Just as a map helps you to plan a long road journey, a financial forecast (often called a budget or a forecast) will help you to plan your business growth, achieve your goals and get your business to where you want it to be.

Predicting the financial future of your business isn’t easy, especially if you are starting a business and don’t have a trading history and historical information to go on but an effective financial forecast has many advantages including:

  • Demonstrating the financial viability of your business venture.
  • Allowing you to measure the actual financial operation of the business against the forecast financial plan and make adjustments where necessary.
  • Allowing you to guide your business in the right direction and take control of your cash flow.
  • Providing a benchmark against which to measure future performance
  • Identifying potential risks and cash shortfalls to keep the business out of financial trouble.
  • Providing an estimate of future cash needs and whether additional investment or borrowing will be necessary.
  • Enabling you to secure a bank loan or other funding, lenders and investors require financial forecasts to show your capacity to repay the loan.

Do you still need to prepare your financial forecasts for 2018? If so, you might like to read my series of blog posts on how to prepare a budget from last year. Click the links below to learn more:

As you look back over the year and reflect on your results, you’ll almost certainly identify gaps in your knowledge and expertise where you need more help. If you’re like the majority of my clients, help with financial forecasting will be top of your list.

Preparing financial forecasts is in my sweet spot as a former CEO. If you’d like help with yours, simply e-mail me to arrange an informal coffee chat.

Meanwhile wishing you a very successful marketing campaign in the run up to Christmas. And as always, thank you so much for reading my articles.

Question: What stops you preparing a financial forecast? I love reading your feedback so please do take a moment to share let me know in the comments box below.

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Over To You

I’d love to start a conversation about whether we’re a good fit to work together. Simply e-mail me to arrange an informal coffee chat. There’s no hard sell. Just solid advice and a straightforward, honest assessment of whether our services would be right for you.

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