04 Jan 3 Quick Tips for Perfecting Your 2018 Projections
You may have already put the finishing touches on your 2018 forecast. However in case you haven’t, here are a few things you need to know:
1. Look for tendencies in your forecasting to gain insights on things you can do to improve this year.
- Did you overestimate revenue and profits? Maybe you were a little too ambitious on your revenue assumptions?
- What about collections from clients and payments to vendors? Did you accurately forecast the timing of those payments?
2. Compare your assumptions on revenue and expense growth compared to your:
- Historical performance
- Industry norms and standards
- It’s possible you’re outperforming your peers in some areas, but underperforming in others. Know your tendencies.
3. Forecast from the bottom up, not the top down. It’s not how much you bill, but how much you keep.
- Plan profit first, then expenses, then revenue.
- Compare your forecasted revenue number based on what you discovered in #2 above.
- If your revenue number is too high based on that, then you either consider adjusting your profit number or consider cutting expenses.
Here’s to a great 2018 for all of us!