Financial forecasts assist in managing your finances. They are future predictions of your business finances, as compared to statements, which provide details of actual results of progress.
The following are five ways forecasting can help your business:
Nicole and John McGee started Busy Bee’s Cleaning Service five years ago. The business services homes, offices, schools and corporate clients.
While Busy Bee is a terrific business with strong revenue, it could not turn a profit. After deciding to end a large labor hire contract and losing more than 60 team members, Nicole and John were unsure how the business was going to survive and were desperate for professional advice.
Nicole and John contacted their Accountant. They needed urgent advice and help to update their business plan and financial forecasting. The Accountant assisted them to reassess their business mission and value proposition, generate accurate financial models for the business and advise on business growth strategies.
“Initially, I was concerned that the sessions would only show how bad our situation was, but I was pleasantly surprised. In fact, having the models informed us about different options we had and has become a valuable tool for the future of our business,” said Nicole.
Nicole and John now operate with confidence knowing how profitable each job is. They had to increase their charge-out rate but now have a clear understanding of the profit margins on each job they undertake. Their newfound confidence shows in their sales pitch and conversations with customers and ensures that they are in control of their business.
Ask for expert advice, use mentors or talk to your Accountant.