Well put together forecasts will not, on their own, get you the funding you need.
Badly put together forecasts could stop you getting the funding you need!
There is no set format for forecasts but typically you will need a 3 year, by month, Profit and Loss forecast with an integrated Cash-Flow Forecast and (if an asset-rich business) a Balance Sheet forecast as well. Clearly the level of detail required will also depend on the amount of money required – the greater the amount, the greater the detail.
I do two things for my clients when it comes to Financial Forecasts:
- I will, if they want, create their Financial Forecasts with them. This involves discussion about the key areas of the business – extracting all the relevant information, and then putting that in a format that ”hangs-together” and ties into the Business Plan. Forecasts need to be justifiable, arithmetically correct and easily adaptable. I make sure they are.
- The other service is to review the Forecasts the client has created and critique them. Sometimes a client can work for weeks on their forecasts and then because they inserted another line or keyed in a new set of figures but didn’t change the addition equations, it doesn’t add up - funders hate that, as it shows the client doesn’t have a good enough handle on the figures. I make sure that doesn’t happen.