The most common two words we business owners say is “What if.” The reason we say it is because we wanna cover all the opportunities and risks so we can take control of the situation, and our business. After all, we want to know what if sales increase or decrease? What if profit margins increase or decrease? What if you bought more efficient equipment? What if you did more advertising and it didn’t? What if you produce the results you expected? And what if you added a field manager to overhead? These are just some of the what if questions. 

I’m sure you have a lot more. Let me explain what a professional forecast looks like. A professional forecast should contain at a minimum, a forecasted monthly income statement forecasted monthly balance sheets. And by the way, this is a real differentiator. You can tell immediately, an amateur forecast from a professional forecast by the exclusion of a monthly forecasted balance sheet. They should definitely be in there forecasted monthly cash flow statements, a forecasted monthly inventory plan if you have inventory in your business, a forecasted monthly trade, accounts payable plan, key performance indicators, and through this process, we will be able to identify the most effective business model you can have.

Is the forecast a crystal ball? No, of course not. But it creates multiple “What if” scenarios encompassing every likely possibility that your business can encounter. When the CFO and the business owner who understands the current climate for the business and the industry work in concept, they can produce the most likely scenario and develop a sound strategy.