Business planning so easy, you can do it

Planning tools that are easy enough for you to use on your own, or with your advisor. Use the data you create to help run your business every day! 

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Business planning so easy, you can do it

Create your plan

If you are preparing your own forecasts or projections you’re not alone. In one of our surveys, 75% of business owner respondents told us that they create their own forecasts. You know your business better than anyone else after all!

After spending years grappling with spreadsheets and trying and failing with other, rigid forecasting software, we have designed FUTRLI to work hard for SMEs. There are 6 ways to create your forecasts in FUTRLI’ scenarios. Creating a projection based upon last year’s data is a great place to start, as if you do nothing different to what you did last year, it will show you whether:

      1. Your business is growing
      2. Your business is flat-lining
      3. Your business is going to run out of cash

How hard is this? It takes 5 seconds! Honestly. We have made it this fast so that you can get started really quickly. But that type of scenario is just an overview, a health check. You really want to create a plan for you and your team to work towards, that can be flexed and changed easily, or copied into multiple versions where you can test different scenarios.

Where do you really want to be next year? The year after? Here’s a quick guide to help you to do this:

Step 1: Understand Your Costs

You may think you should start with forecasting your sales. It’s a much more pleasant place to be in your profit and loss statement after all. We would recommend that starting with your costs will give you a reality check, as you have some element of control over these. Start with your fixed costs. They will only increase when  your business grows, when salaries have to rise or rent increases due to expanding operations:

Fixed Costs

      • Base Wages & Salaries (commissions are variable so leave them for the moment)
      • Rent & Rates
      • Insurance
      • Accountancy/professional fees
      • Print, postage & stationery
      • Loan repayments

Variable costs are just that. They are directly linked to your sales and should be included in your “Direct Costs” area (they are part of your gross profit results). Our forecasting methods include being able to forecast by using formulas; in the case of these costs, many will forecast as a % of revenue:

Variable costs

      • Any cost of sales (they usually have a direct relationship to sales output). This includes any materials or wages that are associated to anything that you sell. (A worker on the factory floor will be a direct cost, whereas administration salaries are an expense)
      • Packing
      • Distribution
      • Marketing

Step 2: Forecasting Your Sales

Forecasting your sales is where we can all get carried away. It can be difficult and often sales are multi-layered with different products, credit terms, services etc. Again, don’t worry. We let you create multiple forecast lines for every account. This delivers two primary things:

  1. You have complete visibility over every layer of your revenue.
    • If something changes, you’re not unpicking one combined sales amount, you can cherry pick what you want to edit
  2. Each forecast line can have different credit terms.
    • When you expect your customers to pay you is critical to projecting an accurate cash flow* (the same of course applies to when you are paying your debts).

Bear in mind that while you want your business to show progression and profit you can’t project sales that are unrealistic.

What we suggest is to complete your first scenario as realistically as you can. Every time you save another forecast line, the grasp of your potential future becomes clearer and clearer.

You don’t have to prepare a separate cash flow, every time you save a forecast line.

This is really important and shouldn’t be underestimated. The work that we have put into automating every step of the process saves hours of time, delivers complete clarity over every transaction’s movement and where you predict your business will be today, and tomorrow:

The impact of these transactions across the Profit & Loss, Balance Sheet and Cash flow statement, as well as all VAT/GST activity and Cash position chart (which gives complete clarity over your cash position as you go) is automatically calculated in the scenario and in any Card (reports) that you subsequently set up. These reports are rich, visual, flexible and can slice and slice your data any way that you need. You can’t do that in spreadsheets!  

Then test your options with more scenarios

Then it’s time to create 2 more scenarios. After copying your master, rename the first copy “Worst case”.

Then make those forecasts a lot more conservative – remember the variable costs will also need to reduce, but if you have set up formula methods here, they will update automatically.

Next, yes you’ve guessed it, make a copy of the original master, call it “Best case”, and go for it!

Now that you have 3 scenarios, it’s time to visualise them side by side.

Visualising your future is the most powerful piece of the puzzle and is what you’ll love using every day

Every KPI, that you analyse when looking at your actual data you can now visualise when you look at the future! Our all-in-one forecasting and reporting engine works really hard to give you so many ways that you can use that future data. See our video here and transform how you and your team work. You definitely don’t want to  leave them in the virtual filing cabinet!  An Introduction into Visualising the Future

This guide is just a suggestion – there are so many more ways you can forecast the future

The suggestion to create scenarios based upon best, worst and predicted futures is just one way you can use our forecasting engine. You can create quick 1 year budgets, or full 5 year 3-way forecasts. You may want to expand your business, take on more staff, expand your product lines or services, take on new premises, or all of these things! You can now truly understand what impact this will have on your business and you, with ease. Pitch for funding or impress the bank

Creating full 3-way forecasts for your start-up or existing business is now a risk-free and pain-free process. Combining these clear, well presented financials as part of your researched business plan we have also covered here. But how do you need to present to your prospective investors?

“"Definitely my favourite so far as budgeting and cashflow forecasting is concerned. Takes those 50 tab spreadsheets and turns them into intelligent forecasting. Pair that with the reporting on the boards, and you've got a winning combo"” - Chris Hooper

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