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1. Self-Assessment
2. Business Idea
3. Market Analysis
4. Management Skills
5. Business Planning
6. Forecasting
7. Financing
8. Support Help
9. Venture Launch
10. Monitor Progress
Graduation!

Forecasting is where you will determine and organize the financial information for your business, showing costs and revenues. The forecasts become your budget. There is nothing mysterious about forecasting – it is a thoughtful process of thinking about each part of the business operation and determining what kinds of expenses will be generated by these activities. Think about your rent, phone system and all other operational issues that have associated costs. The process will help you to also identify the sources and amounts of revenues that will be generated.

Read the article, “Why Forecast,” to get an idea of what you are doing and why. The next article, “Forecasting – the Seven Steps” will help you think through this process, and give you a format to list your sources of expenses and revenues. Two separate articles, one on cash flow and one on breakeven analysis will help you further in understanding the forecasting process. A financial calculator is also provided to help in calculating ratios and looking at other relationships of the financial data.

Once the data is assembled, if you need help organizing this data into an actual forecast, you can sit down with a resource professional. The good news is that you will have already done the hard part. You have thought through how the business functions, what costs are associated, and how you are going to generate revenues. Once you have this information, they can then show you how the data is used in developing a forecast of your operation for the next two or three years.

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