The power of projections

The power of projections

In every business building programme we run, we always start with establishing each business owner’s ideas for the future of their business. These ideas are then focused for the next 6-12 months on revenue, cost and net profit projections – on a month by month basis.

Most times, these business owners have never, ever sat down to plan what their business is going to look like over such a long time-scale. They typically just let things happen. Their clients will ring up and place orders (won’t they?).Costs will stay under control and there will be enough cash in the business (surely!) Gulp.

In the good old buoyant times, getting business and getting paid wasn’t too much of a struggle. How times have changed!

Unless you can plan the income and outgoings of your business with some accuracy you can’t be sure that you will have a good level of profitability at best or, at worst enough cash to stay solvent.

Our members feed back to us that the act of producing projections really gets them focusing on the business:

·         How much they want to make in net profit 

·         What are their  costs

·         The turnover they have to make to reach their targets.  

We often have to bring some objectivity to the numbers, but our members end up focused, empowered and reassured that the projections are attainable.  

As a consequence, the turnover figure on a month by month basis becomes a chunked down objective focus for their marketing activity.

For perhaps the first time in the lifetime of their business, they feel that the future is under their control.