The slogan for the preparation of your financial projections are as follows: accuracy . Your financial projections will be useful (both you and your potential lenders and investors) that if the estimates are reasonable and representative of your cash flow.
Do not make the same mistake that many financial planners do, that is to say to make your projections based on the most optimistic scenarios. These projections are intended to guide your business decisions. When you exaggerate the volume of sales and, therefore, anticipated revenues, you could invest large sums of money in operating costs and goods will remain on your shelf.
If you are in business for some time, use your sales figures to determine your previous projections. They will contribute to an accurate assessment of your cash flow. If, however, you are about to start your business, use market research and statistics to make your projections. In the same vein, benchmarking tools allow you to understand what the financial situation of your business should look like.
In short, whether projections for an established company for many years or for a new company, completeness is required. Sometimes it is better to analyze your sales in shorter periods to achieve the most accurate estimate possible. Over the time periods used for your forecasts are shorter, your estimate will be.
What are the most common errors found in a business plan?
Ignore the competition: You will still face competition. Use your business plan to show how your business can thrive in a crowded market.
Present too many ideas: As an entrepreneur, you have many good ideas, and it may be tempting to present them all in your plan. Remember that your business plan involves the company that grew out of ideas, including operations, logistics, management, finance and marketing.
Depend on a small number of consumers: Some companies are created to meet the needs of a single consumer, but they can not be so vulnerable for long. Plan how you will attract new customers and other contracts.
Have priorities diluted: A plan that covers dozens of priorities is not really a plan. Instead, focus on a few key priorities.
Procrastination: It’s easy to procrastinate preparing your business plan, but it is an essential tool that will help guide the development of your business – do not put off until tomorrow what the we can do today.
Be too optimistic: It is easy to get excited and to provide ideal scenarios, and it is a mistake that can be costly. It is in your interest to forecast financial market and reasonable and accurate, as far as possible.
Resume a model plan: The plan templates can be useful tools, but it is wise not to take too much information from them. Ultimately, your business is about your personality vouslaissez appear.