Forecasting & Budgeting

Overview

Grow your business with confidence when you know how much to spend, when to hire, and how much you’re expecting to earn each year.

It’s hard to manage anything when you don’t have a clearly defined plan. Building a budget for the year, forecasting your sales, and planning out your team’s capacity are the fundamentals of planning for your business. Once you have a plan, you can actually measure againts it to track progress. If you’re not growing as fast as you’ve forecasted, then you can look to your plan to reduce your expenses or slow down your hiring plan accordingly. It’s all tied together and having an integrated plan puts you in control of your business.

Start with your forecast and map out the next 12 months. You can use historical data to inform future performance. Account for seasonality, marketing campaigns, competitor activity, and anything else you can predict will have an impact on your sales numbers.

Use this forecast to build your budget for how much you’ll spend. Again, look to historical information to determine what your expenses have been and use those to predict future expenses. Usually this information will come from your accounting records, which is ideally being done in QuickBooks Online. You’ll use this budget to run comparisons versus actual spending each month (Budget vs Actuals) to track how you’re doing and make adjustments as needed throughout the year to hit your targets.

To drill down a level deeper on your expenses, you can build a specific capacity planning tool to help you understand your hiring needs as you grow. This will be highly customized for your specific business.

Recommended tools

• Spreadsheets will be your best friend when it comes to forecasting, budgeting, and capacity planning. Excel or Google Sheets will both work.

• QuickBooks Online for accounting software (link). You can also load your budget in here for automated budget versus actual reporting.