Developing projections can help you plan for your company’s future

Developing a small business from the ground up is no easy task. In a sense, it demands that you see the future – you need to know not only how much your company is capable of now, but also what you plan to accomplish in six months, or a year.

It's wise to plan thoroughly for your company's future growth by drawing up projections. How much will you ramp up product development next year? How many new people will you hire? Will you invest in new raw materials, new technology or maybe even a new facility?

Whatever you anticipate spending, project it. Then go back, revisit and replan everything as you go.

Identifying costs and planning ahead

To project how your business development process will unfold down the road, you've got to follow a two-step process, according to the Industry Skills Councils. The first step is to identify all the costs you have now as well as the revenue you're currently making. How much are you spending on real estate, labour, materials and so on? How much are you making with each sale?

Once you've figured out this basic profit margin calculation, the second step is to look ahead and find ways to increase it. There are basically two ways to strengthen your financial plan for the future – either you cut costs, or you increase production and bring in greater revenue. A good projection shows a clear plan for doing one or both.

Setting big – but attainable – goals

So what are your goals when it comes to business development? Certainly you want to increase your profits, but by how much, and how quickly can you pull it off? Entrepreneur Magazine recommends coming up with a strategy that balances reality with ambition. In other words, you want to think big, but you also want to make sure your goals are realistic.

Set goals and devise a plan to meet them.

Finding this balance is hard. What might be even harder is following up over time, assessing whether you've made enough progress and making adjustments if you haven't. If this process seems overly complicated, the good news is that chartered accountants can lend a hand.

Getting professional help with the process

If you look to the future and see confusion or uncertainty, that might mean you need a little help with solidifying your plans. Don't be afraid to reach out and ask. Chances are, there's a business development consultant out there who can help you find your way and get your business back on a growth trajectory.

At Wilson Porter, we have a team of experts who know all about that process. Our financial advisors can help with everything from projection to forecasting to monitoring cash flow results. Whatever improvements you're looking to make to how your business is run, we can help you make them.