Revenues

How to Forecast Revenue and Growth

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 Forecasting
● is calculating and Businesses utilize
forecasting to
predicting usually
determine how to
as a result of study allocate their budgets
and analysis of or plan for anticipated
available pertinent expenses for an
upcoming period of
data.
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time.
 REVENUE
●is the total income produced by a given
source

●a property expected to yield large annual

revenue

the gross income returned by an investment

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●
 GROWTH
● is a stage in the process of growing

● it is a result of growth

● It is anticipated progressive growth

especially in capital value and income.
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 Building Financial Forecasts
1. Fixed Costs/Overhead
● a. Rent
● b. Utility bills
● c. Phone bills/communication costs
● d. Accounting/bookkeeping
● e. Legal/insurance/licensing fees
● f. Postage
● g. Technology
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● h. Advertising & Marketing

● i. Salaries
 Building Financial Forecasts

2. Variable Costs
● a. Cost of Goods Sold
● b. Materials and supplies
● c. Packaging
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 Building Financial Forecasts

3. Direct Labor Costs

● a. Customer service
● b. Direct sales
● c. Direct marketing
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 FORECAST REVENUE
Conservative revenue might have the following
assumptions:
● 1. Low price point.

● 2. Two marketing channels.

● 3. No sales staff.

● 4. One new product or service introduced

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each year for the first three years.

 FORECAST REVENUE
Conservative revenue might have the following
assumptions:
● 1. Low price point.

● 2. Two marketing channels.

● 3. No sales staff.

● 4. One new product or service introduced

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each year for the first three years.

 FORECAST REVENUE
Aggressive case might have the following assumptions:
1. Low price point for base product, higher price for
premium product.
2. Three to four marketing channels managed by a
marketing manager.
3. Two salespeople paid on commission.
4. One new product or service introduced for each segment
on the market in years two and three.
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 Conservative revenue Aggressive case
FORECAST
1. Low price point. REVENUE
1. Low price point for base
product, higher price for
2. Two marketing premium product.
1. Low price point.

channels. 2. Two marketing channels.

2. Three to four marketing
3. No sales staff.
4. One new product or service introduced each year for the first

3. No sales staff.
three years.
channels managed by a
4. One new product or marketing manager.
service introduced each 3. Two salespeople paid on
commission.
year for the first three
4. One new product or service
years. introduced for each segment
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on the market in years two

and three.
 Key Ratios in Forecasting
1. Decide on a Timeline
● Decide on how far you want to look into the future.

This will be determined by creating the report.

2. Forecast Your Expenses

● Predicting expenses is perhaps the easiest part of

revenue forecast with past expense records of an

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existing business and researched forecast.

 Two Types of Expenses
1. Fixed Costs - These are the expenses
that remain the same every month.

2. Variable Costs - Those are the expenses

that change every month, depending on
your sales volume.
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Thank you!
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