Should your business plan be conservative or aggressive?
Any business owner knows that business planning and forecasting are worthwhile investments. However, when you’re overworked sometimes they take a backseat. By changing your approach and ditching the spreadsheets, you’ll see that you can plan for a range of eventualities and you’re not forced to choose between making a conservative or aggressive business forecast.
I asked Futrli CEO and Founder, Hannah Dawson for some tips from her experience of forecasting with Futrli, for Futrli. She explained that it’s crucial to consider as many scenarios as possible. Her advice can be broken down into the following key parts…
Move away from spreadsheets to raise efficiency
“The most important thing is to make sure that you are using a cloud package to do this – do not use spreadsheets! I have created some monolithic, amazing spreadsheets and they have become so big that you really struggle to update them. So what happens? You feel very proud of this impressive wall of numbers, which ends up going in the bin as you reflect on it in 12 months time and realise that your business doesn’t look like this at all.
If your forecast is online, in the cloud, you can access it anywhere and connect it to the financial heart of your business, your accounts package. Futrli integrates seamlessly with QuickBooks and Xero, for example, and frees you from the unrelenting inputting of data that takes up so much of your time.”
Test different scenarios to safeguard your business
“Every business has got multiple sets of futures that it could pursue; there’s not one hard and fast track that you’re going to run down, because sometimes you just don’t know what is around the corner. So, to be able to re-test different scenarios, we use our aptly named scenario section which allows you to create your base forecast and layer other assumptions on top of it.
So, for example, I create a scenario of us taking on 10 new members of staff at different times in the future, allowing for all the costs and benefits of this. You can then, with the click of a button, link those scenarios to your base forecast and you’re able to see, clearly, the differences between them. The fact that the software easily keeps up with all the questions that formulate in your head, gives you so much scope.”
Better communication leads to better collaboration
“To avoid ‘System failure’ one of the most important parts of business planning and forecasting is the communication of your assumptions. However, it’s hard to keep your team informed and on target if you’re the only one with access to a master spreadsheet that only you understand. Futrli allows you to visualise your data and draw deep insight, which you can then share easily with your team.”