How Do You Create A Business Financial Forecast?
A business financial forecast is an important piece of financial information often used by lenders or vendors to assess your business’s stability before they agree to do business with you. A good financial forecast must be based in fact drawn from prior operation income and expense of the business with a logical method of increasing or decreasing the costs for the future year. Creating a business financial forecast is a labor-intensive process that forces the business owner to assess every line of income and expense for their business, but it’s enormously beneficial for making management decisions as well as applying for loans. Gather detailed information on all the business’s current year income and expenses. Assess the income information one type of income (or account) at a time. Study the growth rate of income since you have been in business. If you expect growth to continue at the same rate, then apply that percentage increase to income for the next year. If you expect to add a new
