A forecast is your best guess at how much revenue and cost your business will generate in the coming years. The forecast can feel daunting for entrepreneurs, but don’t worry – all you need to do here is make reasonable estimates based on your expertise and research. It’s also a great idea to track down similar businesses so you can base your data on that benchmark.
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 ensure 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.
Transcript
Sabrina (00:00):
Hi, welcome to the Live Plan Forecast. I’m here today to tell you a little bit about the tool and how it’s gonna help you run your business better. This is a tool that’ll help you build a full strategic financial forecast. Don’t be afraid of it. You don’t have to have an mba. You don’t need to be a financial wizard. In fact, as the business owner, you are best positioned to go through the financial forecast and with the knowledge you have about your business and the help that live Plan gives you, you will come through this process with a strategic roadmap that’ll keep your business healthy and will help you make financial decisions that are going to be good for your business. Let’s take a look at how Live Plan can actually help you. So when you look at the live plan forecast, you’re gonna notice various different tools that are gonna help you complete your financial forecast.
Sabrina (00:48):
We’re gonna give you a revenue forecast where you’ll be able to take a business model that fits your business, it’s completely customizable, and really think through that strategic forecast while we hold your hand with a wizard, they’re gonna then move into direct costs. What are the actual costs involved in selling your service or your product? Live plan will give you another wizard and we’ll walk you through that whole process, including thinking about direct labor. You’ll get into your personnel. It’s all your people expenses. People are usually the most important part of a business, and we help you think about it in the right financial formula. Here in the Live Plan Forecast Tool, the expense tool will help you forecast all of your expenses, and if you want to, you can tie those expenses directly back to your revenue. We’ll think about your assets and you’ll be able to actually put those tangible assets in, and then we’ll move into taxes, dividends, cash flow, assumptions, every step of the way with a wizard and questions so that you’re sure to do this correctly.
Sabrina (01:51):
Once you’re done with the Financial Forecast, we actually automatically put together a profit and loss statement, a balance sheet statement, and a cash flow statement. These are all projections to help you run your business a financial roadmap, so that you can make better decisions. At this point, you’ve seen all the tools that Live Plan has to offer, and you’re ready to just jump right in. Don’t be afraid. Live Plan is here to help. It’s gonna guide you every step of the way, and at the end of it, you’re gonna have a full professional financial forecast that’s gonna help you make better decisions for your business.