What the heck are financial projections anyway?

Ah, financial projections. Basically my favorite thing about getting a MBA and one of my favorite things about my work now. I get to lean into my love of spreadsheets for this one so I’m all in! That being said, I’ve recently heard several business owners tell me that they need projections, but when I follow up with asking them why, they struggle to articulate the reason.

Financial projections are super powerful. They are mathematical representations of potential scenarios and, if used correctly, can tell you a lot about the way you should use your time, money, and other resources. But, if you don’t know what questions you want them to answer then they will almost certainly be a big ol’ waste of time. 

So, what kind of questions are a good fit for financial projections? 

• Which of these two pricing models will earn me more money? 

• How do I make sure that I don’t work more than 40 hours/week while still earning my goal amount? 

• What is the right number of wedding clients vs. commercial clients in order to reach my revenue and work/life balance goals? 

• What will my expenses be over the next year if I start investing in marketing? What will be my return on that investment? 

• Can I afford to hire an employee? Can I afford not to?

Want to learn how to make your own? You may be a good fit for the Verdi Business Money Club! 

XOXO