FINANCIAL PROJECTIONS MADE SIMPLE…
OFFPLAN
I am going to share my spreadsheet that you can use to project your financial future - kinda.
Why 'kinda'? Well, because projections are notoriously 'iffy' - just too many unknowns. And almost all of them are beyond your control. But even a poor projection is better than the crossed finger method.
I have used a spreadsheet like this for years to monitor our backlog of work. I have to admit that my interest in projecting fees into the future was usually because I feared that our work was drying up. It usually wasn't. Over time you learn that projections more than three months out aren’t very trustworthy - but really worth doing for the insights that your gain.
Here is the spreadsheet
So let me explain what you are looking at and how it works.
This column lists all your active projects.
The column headers to the right of the first column represent months. Usually keep between 18 and 24 months visible.
This area at the intersection of project names and the future months contains your projected revenue.
These are *actual* revenue results in the 'past' months.
At the far right are three columns that act as checks and balances.
This area is where your results are shown. From top to bottom they are:
REVENUES THIS MONTH - This is a simple formula totaling of all the Projected or Actual net revenues for the month.
T12M REVENUES - "T12M" is an abbreviation for Trailing 12 Months. This tracks your trend in revenues.
NET EXPENSES THIS MONTH - This is your projected or actual expenses without consultants.
PROFIT / (LOSS) - This is revenues minus expenses.
RUNNING PROFIT / (LOSS) - This shows your year-to-date profit or loss.
This is really valuable information for less than a dozen hours worth of effort spread out over the year.
That's All There Is To It
The spreadsheet looks daunting because of its size, but it is actually pretty simple. Once set up you only need to do updates a couple of times a month when new work comes in or there is a change in scope for ongoing work. Then you do monthly updates when you have invoices and expense results. Once every six months or so add six months' worth of columns.
This is really valuable information for less than a dozen hours worth of effort spread out over the year.
Kickstart your Financial Projections with OFFPLAN.
Step by step instructions.
The spreadsheet comes in three formats:
.xlsx, .number, and .xls
