The info you need to start forecasting your finances

This thought leadership piece was provided by FD Works.

FD Works are supporting the Tech South West StartUp Studio, a virtual accelerator for early stage tech companies in the South West.

Financial forecasting is a guide to the future performance of your business. Creating an accurate forecast gives you the opportunity to test decisions out, and make mistakes on paper before committing to them in the real world.

Large companies often have systems in place, created by experts, to figure out these numbers, but for SMEs without an in-house finance team it can be much more of a challenge.

The hardest part is getting started. With so much conflicting information out there on what demands your focus, it’s easy to get overwhelmed. So, what do you really need to get started?


What needs to change today for your life to be different tomorrow?

For some, it’s enough money to take an extra day off a week, for others it might be supporting a cause close to their heart – whatever your reason why, get clear on it. Your business exists to serve you in some way, so bring this purpose into your planning.

Sales predictions

As a start up this might seem daunting, but some in depth market research can give you good enough answers until you have live data to hand. Set out to put together a realistic view of your expected sales over the next 12 months. Remember that a realistic forecast is the goal here, so while optimism and ambition has its place, aim to use numbers that are achievable and go from there.

Expense predictions

Along with your salary and that of your employees, any other costs that are recurring or one offs need to be considered. Once you have the basic predictable costs in place (utilities, rent, etc) then you are in a better position to prepare for the unpredictable and decide on any extra investments you might want to make.

Highs and lows

It’s inevitable that you’ll face good times and bad in business. The important thing is to recognise any patterns so that you can be armed and ready for both. Of course there will always be an element of the unknown (no one saw the pandemic coming, for example) but maximising the opportunity to profit from your busy season will help protect you from quieter periods.

Opportunities and threats

If you haven’t done a SWOT analysis taking your finances into account, then it’s worth taking the time out to do one before your forecast is set in place. Are there opportunities that you could benefit from if you have the right cashflow in place? Perhaps a potential supply chain issue that could be avoided ahead of time with a little planning? The reality of your business operations and your future finances go hand in hand – use them in partnership to support your business.

Don’t do it alone

You know your business best, so once you’ve chosen the right model for your business there’s nothing stopping you from populating it and creating and accurate and realistic forecast. But the best advice we can give you is to get help. SMEs don’t operate like large businesses, and SME owners know that best. Reach out to your contacts, and even your competitors, to get their take and make sure you’re not being too overcautious or optimistic.

Partner with an expert

Finally, getting the right financial experts involved can make or break your financial projections. If you work with large institutions, you probably already know that they tend to box SMEs in and give them the ‘one size fits all’ treatment. However, small financial advisors come with their own risks of being unreliable. Do your homework and find the right fit for you and your business.

At FD Works we know what it’s like to run an SME, from startup to success. Not only can we provide you with a customisable financial forecasting model, but we’re here to support you through every step with valuable insights based on your individual circumstance.

If you’re interested in purchasing our forecasting model, need some more help on getting started, or think we can support you in any other element of your business then get in touch on 01454 300 999 or email


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