Financial Projections
Income Statement Projection
Focus on three approaches. A great business plan will reflect multiple plans under varying revenue scenarios. Typically, the three approaches involve creating financial projections that reflect:
- a "best-case" scenario if no outside risk factors negatively impact the business plan
- a "most-likely" scenario, which is by definition a more conservative, realistic approach, and
- a "worst-case" scenario.
Each scenario forces you to establish an action plan for expense reductions should negative outside risk factors impact future financial performance, i.e. loss of a main customer, margin compression, loss of a key employee, etc.
Track actual performance closely against financial projections, and make necessary changes without hesitation.
Open our Tool Box to find a worksheet that helps formulate your Financial Projection Worksheet.
Balance Sheet Projection
Most business owners focus solely on the income statement when planning for the future. However, the strength and value of a company is reflected and maintained on the balance sheet. To understand how your income statement projections impact your company's future, utilize our Balance Sheet Projection Worksheet to ensure you will be able to reach your company's financial goals.
