Business Plan Forecast

To effectively manage working capital and cash flow, a company must have a reasonable idea of how much revenue it plans to receive over a given time period and what its necessary expenses will be over that same period of time.

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An annual financial plan is a guidebook of sorts that tells you where you’re at financially right now, what your goals are looking ahead and what areas or issues need to be addressed so that you can meet those goals.

The plan covers every aspect of your financial life, from investing to taxes to your outlook for retirement.

People measure a business and its growth by sales, and your sales forecast sets the standard for expenses, profits and growth.

The sales forecast is almost always going to be the first set of numbers you’ll track for plan vs. If nothing else, just forecast your sales, track plan vs.

COGS for a bookstore include what the storeowner pays to buy books.

COGS for Garrett are what he paid for the bicycles, accessories, and clothing he sold during the month.

While both processes orient financial activity toward the future, a financial plan is a road-map drafted now that can be followed over time and a financial forecast is a projection or estimate of future outcomes predicted today.

A financial plan is a process a company lays out, typically broken down into a step-by-step format, for utilizing its available capital and other assets to meet its goals for growth or profit based on a reasonable financial forecast.

I was a vice president of a market research firm for several years, doing expensive forecasts, and I saw many times that there’s nothing better than the educated guess of somebody who knows the business well.

All those sophisticated techniques depend on data from the past.


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