The launch of a Startup: predict and plan to build solid foundations

If you want to start a business and even more a startup, you cannot fail to implement economic-financial forecasts. They are critical to building a solid business because they provide the opportunity to plan strategies, sift hypotheses, be fully responsible for the design and co-design of your own company, monitor, and, if appropriate, plan in a spiral of improvement and growth towards the corporate dream.

When starting a business, one cannot fail to make predictions.

If you want to be an entrepreneur and build solid business foundations, you cannot help but make predictions. A detailed forecast provides an objective perspective to entrepreneurs and potential investors since it shifts the startup from what could happen to what could reasonably happen thanks to the strategy, the forecasts, and the hypotheses on which it is based.

Financial analysis? Far from being child’s play!

A detailed forecast provides clarity and aligns the startup’s expectations with those of the investors in the case of the startup. The entrepreneur and the investor would always like to have a detailed analysis of their financial income and expenses. Just as the consultant would like to present a job in which the data are as certain. Especially for a new company, making economic and financial forecasts is certainly not child’s play! Forecasts are always implemented based on trends, recurring revenues, and other benchmarks found in the past and present of the company. A new company does not have this data available simply because it is starting its journey now. Often, let’s face it, the startup is unclear about its reference market. Let alone if it can accurately predict its financial income and the times to achieve them!

How to be convincing with investors?

Potential investors would like certainties. So how do you convince them of the goodness of a project? The biggest startup of start-uppers is to work for a long time without taking into account the vision of possible investors, involving them from the beginning, and making them an active part, fundamental players in their “journey” towards the corporate dream. The investor must be attracted to the project. For this to happen, the financial projection for startup must convince him of the logic and feasibility of the project and the proposed financial model. There must be no inconsistency between the project objectives and the planned strategy. Predicting revenue rationally without ignoring the strategy to be implemented is essential. An accurate financial analysis gives credibility in the eyes of investors as it gives them greater certainty,

Financial forecast: the first, essential step towards the corporate dream

Revenue and cost forecasting should be an iterative process for startups to identify an effective business model. A good financial plan will help us make decisions, monitor, and improve, also because it eventually allows us to think about why the forecasts did not come out as expected. At that point, the reflection on how to “adjust the shot” on strategies and business mode startups.

In that case, the root cause of the problem will have to be sought and assessed whether the assumptions underlying the forecasts have turned out to be incorrect. In this case, the model can easily be updated by identifying new hypotheses and, therefore, new financial forecasts. Or you can plan, fine-tune, and implement more effective strategies. Another advantage of a detailed financial forecast is that it allows startups to test the validity of the various hypotheses and find the most significant variables for the company’s success. In this way, the company can also enjoy greater credibility in the eyes of investors.

Some might think that a financial plan is the last thing investors look at. On the contrary, it is one of their most important documents. The firm should not worry about the additional effort and time involved in good financial forecasting work, as it is essential to plan and act consciously for the firm’s good. We never forget that a good financial forecast lets us focus on the most important strategic variables. In short, it is an indispensable, essential tool necessary to lead a new company towards business success and realize its business dream.

For more information you should visit business plan consultants.

FOCUS: The 7 RELEVANT points to starting a startup

1. Economic and financial forecasts are essential for building a solid business;
2. Forecasts provide an objective point of view based on assumptions and strategies.
3. Planning is also fundamental in managing the relationship with investors who, in this way, feel safer.
4. To attract investors, you must start your dream and business project from the beginning.
5. Making an economical financial plan is not a waste of time but precious time to reflect on strategic variables that are fundamental for the company.
6. Planning also means monitoring and “adjusting the shot” to improve.
7. The financial plan is a serious matter: essential, which requires appropriate technical and transversal skills.

Do not miss the next article, which will explain how to predict the revenues and costs of your startup!

It is possible to take advantage of such a destabilizing moment to reinvent yourself. And find the right way to start over, be reborn, and grow without losing your identity. But this is only possible by relying on a team of experts who can analyze the situation and develop a tailor-made strategy to startup waste of time, energy and resources as well as to avoid errors that could be fatal.

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