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Forecast Your Future With a Projections Dashboard
Everyone knows the importance of planning for the future (i.e. it's essential), but it can be HARD to do—especially when you are trying to predict your business's financial outlook. Fortunately, it can be done with more than just guesswork or luck. We’ve created a streamlined model to help you project your finances and budget for the upcoming year with more data-backed accuracy. We’ll walk you through the steps to create a reliable baseline for your projections, using Google Sheets. Whether you’re a business coach, fractional analyst, CFO, etc. this guide will make the process straightforward and manageable.
Why Projections Matter
We know that the idea of predicting future revenue can be intimidating, but having a solid projection model is so important for strategic planning. It allows you to set realistic goals, anticipate potential challenges, and make informed decisions. With a good projection model, you can take what you’ve done in the past and use it to forecast the future with a reasonable degree of confidence.
Getting Started with Google Sheets
We’ll be using Google Sheets to build out this model. If you've been around for a while, you know we use Google Sheet/Looker Studio because it's our favorite! If you have any questions about it, feel free to reach out. We are always here to help!
Here's what you’ll need to know to get started with your projections:
Assumptions: Start by entering some basic assumptions from the previous year. For instance, let’s say your average monthly revenue for retainer services was $3,745, and you had an average of 8.2 clients per month. While you can’t actually have a fraction of a client, for projection purposes, it’s okay to work with averages.
New Client Pricing: Calculate what you’d charge a new client today based on last year’s data. This will be your starting point for projections.
Revenue Loss: Factor in a conservative estimate for revenue loss—let’s say 15% per month for example. This accounts for clients downgrading packages, leaving, or other changes.
Building Your Projection Model
With the assumptions in place, it’s time to dive into the projections:
Baseline from Last Year: Start with your actual figures from the previous year. This gives you a solid foundation to build on.
Adding New Clients: Project how many new clients you expect to add each month. Keep a running total of these clients to see how they contribute to your overall revenue.
Price Adjustments: Incorporate planned price increases for each client. For example, you might apply a 10% increase during their annual renewal month. It’s important to clarify that this is a one-time adjustment for each client, not a cumulative monthly increase.
Account for Revenue Loss: Input your estimated revenue loss for each month. In our example, we assume no loss in Q1 but start applying a 15% loss from Q2 onward.
Summarize the Results: Add up all the new client revenue, price adjustments, and losses to get a clear picture of your projected revenue for the year.
By the end, you’ll have a projection that shows how much you can expect to make, taking into account the big 3 factors - new clients, price changes, and potential revenue losses.
Bringing It All Together
After completing your projections, the next step is to monitor your actual performance against these goals. This is where dashboards come into play. By integrating your projections into a custom dashboard, you can track your progress in real-time. If you’re using tools like HubSpot (a CRM system), a custom dashboard can help you stay on top of your sales leads, conversions, and other key metrics.
Final Thoughts
Creating a projection model doesn’t have to be complicated. With this simple approach, you can lay a solid foundation for your business’s financial planning in the coming year. And remember, these projections are just a starting point. As you gather more data and refine your processes, your projections will become more accurate, helping you make smarter decisions for your business.
If you need a more detailed, customized model, or if you want help integrating your projections into a comprehensive dashboard, feel free to reach out. We love diving into the data and making it work for you.
Happy projecting!
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