No one can predict the future with complete accuracy, but you should do your best to plan for it. Financial projections can help your business’s overall success by helping you manage your business plan and spending.
Knowing Your Business
When dealing with any financial professionals, the best thing you can do is lead with honesty and transparency. Anyone involved in your business’s finances should know your business as well as you do in order to best serve you and your interests. When it’s your business on the line, it’s easy to let emotions dictate decisions that should instead be decided by a formulaic approach.
In addition to financial projections and forecasts for your individual business, you should also be concerned about trends and updates happening in your industry. These will likely be folded into your financial forecast, analyzing how policy changes and economic shifts may affect your business and other businesses in your industry.
An Extended Forecast Isn’t Just for Meteorologists
Your financial forecast should encompass projections for at least 6 to 12 months, but a plan that stretches further into the future is appealing for banks and angel investors. It’s often best to have a detailed financial plan that covers a period of 2 to 5 years. Keep in mind that the plan won’t be set in stone. The plan should be visited at least once per quarter, or when a major event occurs.
Creating a financial forecast that stretches into the future serves as a safety net. If your business is in need of funding, you can fall back on your plan when considering loans or fundraising. This saves you from scrambling when you’re in a cash crunch.
Who Should Take the Lead on Financial Forecasting?
No matter the size of your business, financial planning is crucial. It’s something you should consider before the business starts, and at every step along the way.
When choosing a company or individual to take the lead on financial projections and forecasts for your business, you want to hire someone you can trust. They should have significant expertise in this sector of small business financial advising.
At Morris Teper, CPA, PC, we make your needs a priority and customize our plan accordingly. Our services can range from top-level reports to detailed financial models.