When starting a business it is important to prepare a projection. You should include one in your business plan.
A projection is a financial statement that describes both anticipated income and expenses. In other words, a Projection shows possible future income and future expenses. Projections are usually written over a future period such as a year. Ideally, you should itemize income and expenses by month for at least one year.
A few things to note about the projection above. Revenue has increased every month; and expenses have remained the same. Every business is different. When you prepare a projection make sure it is as realistic as possible. It can be a very valuable tool; but only if it is based on “real” numbers. When preparing a projection it is important that you research, research and research some more.
Your expenses and revenues must be as accurate as possible. Do not make estimates about your expenses out of “thin air.” For example, to determine rent expense, identify possible locations and find the cost to rent the place. Will you work out of your home or out of an office? Calculate realistic costs associated with such expenses. Visit the location and ifnd out the rental costs.
At Business Start Ups, LLC, we can help you with the process of starting your new business. We can help with setting up your accounting system, website design or incorporation .