Financial projections - a key part of a business plan
Kai Hockerts, Professor, Copenhagen Business School
Financial projections are a key part of a business plan.
You want to build a long-term projection that might run over the next five years. However, the key element is actually the next 12 to 24 months.Tell us what you expect, how your company will develop. Anything beyond that is highly uncertain, and only gives us an idea of what your plans for the future are.
Therefore, it is important that you look at different scenarios, different options for the future. It is crucial that when you provide financials, you don't just give us overall turnover numbers. You need to provide the single unit economics. What is your variable cost? How many numbers of products are you planning to sell? If you have different products and services, tell us which ones are going to make up what part of your turnover.
Financial projections are a key part of a business plan.
You want to build a long-term projection that might run over the next five years. However, the key element is actually the next 12 to 24 months.Tell us what you expect, how your company will develop. Anything beyond that is highly uncertain, and only gives us an idea of what your plans for the future are.
Therefore, it is important that you look at different scenarios, different options for the future. It is crucial that when you provide financials, you don't just give us overall turnover numbers. You need to provide the single unit economics. What is your variable cost? How many numbers of products are you planning to sell? If you have different products and services, tell us which ones are going to make up what part of your turnover.
This blog post is based on my learnings from the course on ‘social entrepreneurship’ offered by Copenhagen Business School through Coursera (2014).
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