Making Financial Projections in Your Business Plan

Whether you are seeking funding from investors or you are compiling a business plan to serve as a blueprint for managing and monitoring your business, it is imperative that you make financial projections.

Financial projections can be intimidating. However, they are less a matter of mathematical aptitude and more a matter of your knowledge of your business, the industry, and the market.

To make projections, such as sales forecasts, break down sales into manageable parts. For example, first outline the products and services you offer, the unit price for each item, the anticipated inventory, projected sales per item for each day, week, month, etc. You will base these numbers on your experience in the industry and research. Finally, make an educated guess regarding total sales. Using the same procedure, calculate your expenses or startup costs if launching a new business. Use a template or sample as a guide.