Stabilizing Your Revenue Stream

Even for mature businesses, forecasting sales, and therefore forecasting revenue, is a challenge. Aside from the things your business can control, like production and pricing, there are external factors such as competition and the economy that can change the entire game. Established businesses often use past data to forecast the future, but new businesses have no such reference points. What then, do you do about forecasting?

Often new entrepreneurs become distressed when monthly figures are off from their plans. Months can vary a lot, so it makes more sense to gauge your progress by the quarter. If the quarter is off, too, then you may have cause for concern.

On a practical note, Pamela Slim wrote A Simple Way to Plan Your Revenue Targets recently, suggesting developing multiple income streams. That post was specifically aimed at coaches whose product is their billable time, which places very real limits on how much income one can earn. But whatever your line of business, think about ways to even out the ups and downs of your business revenue. If you make products, think about services you can offer that are related. If you offer a seasonal or cyclical product or service, consider what you can do to bring in revenue in the slower times.

It may not make forecasting easier, but it will help ease your concerns over variable revenue.