Basic Numbers

Basic Business Numbers

You may not have the need for a complete financial forecast, but it’s just a shame to run a business without managing a simple sales forecast, expense budget, and — if and only if you’re planning a startup — an estimate of startup costs. These are all relatively simple estimates, with relatively simple math, that...


Yes, You are Qualified to Forecast Your Business

There’s a scene in one of the Monty Python movies in which the woman on the operating table is about to give birth. Frightened, she asks the doctor–a memorable John Cleese character–“Doctor, doctor, what do I do?” The doctor, looking down at her with a sneer, answers “You? Nothing. You’re not qualified!” It’s a very...


Forecasting is More Art Than Science

Think of the weather forecast. You don’t have to study the process to know what’s going on. In the background, there’s a community of meteorologists and public sector agencies gathering lots of data, constantly, on winds and clouds and pressure. The forecast takes that data into account and guesses the future, usually adding human judgment...


The Telephone Tree in Reverse

So you want to know something you don’t know. Here’s one way to find out. Get on the phone. Think of somebody to call first. Come on, you can think of somebody. Somebody who might have some idea. No ideas at all? Then call up the local Small Business Development Center, if you have one...


Forecast Your Sales

Your sales forecast is the backbone of your business plan. People measure a business and its growth by sales, and your sales forecast sets the standard for expenses, profits and growth. The sales forecast is almost always going to be the first set of numbers you’ll track for plan vs. actual use. This is what...


Spreadsheet Basics

You probably know this already, but I’ll go over it just in case. I recommend using Business Plan Pro software so you don’t have to do this, but it’s good to know anyhow, and you can certainly do everything in this book without that software. So here’s a bit about spreadsheets. Spreadsheets are normally arranged in rows...


So What’s Accrual Accounting and Why Does it Matter?

So you make a sale. When you deliver the goods, you record it as a sale. If the customer didn’t pay you immediately, you record the accrued amount as Accounts Receivable. You order some goods. When you receive them, you don’t pay for them. Instead, you record the accrued amount as Accounts Payable. At the...


Snapshots of Spreadsheets

Just a quick note. I hope it’s obvious. With examples in this book I’m not showing you the full columns of the spreadsheets, because that would be awkward. Numbers would have to be very small and difficult to read. I use my spreadsheets for sales forecasting and other normal monthly projections with a standard layout. I base my...


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