Definition

Estimating how much money will come in over a future period using sales data. Planning ahead gives a clearer picture of the company’s financial health.

What to consider

  • Base projections on realistic assumptions.
  • Consider best and worst-case scenarios.
  • Update projections regularly.

Real world scenarios

  • A startup in Austin created a three-year projection of revenue and expenses to attract investors.
  • An entrepreneur in Denver modeled future cash flows to plan for a new product launch.
  • A small firm prepared detailed financial projections before applying for a bank loan.

Related terms

Reviewing: Entrepreneurial Finances (90 of 100)
Topics
Mia's avatar
Hey there! I’m Mia. Have questions about Revenue Forecasting?
Mia's avatar
I’ve got a few ideas you can put into action today. Ready to dive in?