Wouldn’t it be great to have a crystal ball that enabled us to see in the future?
(Unfortunately, I haven’t found one of those yet!)
While we can’t quite see into the future, there are some things we can do today to help us get to where we want to go. When you understand where you want your business to be, it’s easier to take steps to reach these goals, and ultimately help predict your business’s future.
If you’ve read our post on creating a 12-month business plan, this post is a little different.
Instead, we’re going to help you with a business forecast that allows you to have a better idea of where you want your business to be in five years.
A key place to begin is by asking yourself these four questions.
4 Business Projection Questions to Ask Yourself
1. Where Do You Want Your Business to Be?
Learning where your business can be in the next five years, and the steps you need to take to reach these goals is exciting.
You can better understand where you want your business to be by answering a few questions:
- What industries do you want to enter or leave?
- How much revenue do you want to generate annually?
- What markets do you want to enter or leave?
- What products or services do you want to add to your business?
- What’s your vision and mission for the future?
Once you have a firm understanding of where you want your business to be in the next five years, it’s time to create goals and milestones to reach. If you’re going to increase revenue, you may forecast how you’ll boost sales.
Do you want to increase the average sale price per customer? Will you need to create new products or services? If so, when will these products be introduced to the market?
Create a list of goals that you need to reach to hit your business forecasts.
For example, a great way to reach your goals is to hire a team of professionals who can support the same vision for your company.
2. What New Hires Will You Need to Make?
You can only reach your goals with the right team in place. Even if you have a strong team today, a lot can change in five years. You may need to hire new employees and add new teams to your business.
Your current team can only help you reach a certain level of growth. Depending on your goals and where you want your business to be, consider:
- What new hires do you need to make to reach your goals?
- Adding teams, if required.
- Adding new internal departments.
You may reach your goals through outsourcing, or you may want to build an internal team to meet your goals. Consider the key stakeholders your business will need to add to help your business over the next five years.
Branding will play a significant role in your hiring, but with five years, you have time to brand your business properly.
Remember, you want to create a company culture that resonates with your team. A staggering 75% of employees research a company’s reputation when they’re interested in applying for open positions.
Create a business that customers and employees love to attract the talent your business needs to reach its goals.
3. How Will the Industry Change?
Today, 46% of consumers prefer shopping at small businesses. You don’t know what the industry or local economy will hold for your business in five years. However, you can and should spend time forecasting your industry’s changes.
You can do this in a few ways:
- Read through industry forecasts to see what economists predict the industry will be like in five years.
- Review your historical data to see what products or services are growing in popularity and what areas of your business may become obsolete.
- What services or products will be in demand?
- Will your industry grow outside of a geolocation? Will there be more or less opportunities?
You’ll want to use your year-end planning to understand how your industry is changing and how your business is adjusting to these changes.
When you better understand where your industry will be, you can adjust your business model to adapt to these changes. As part of your business projection, create a best- and worst-case scenario of what might happen in your industry.
4. What Life Do You Want to Create as a Business Owner?
Your age and desires will determine where you want to be as a business owner in five years. Business growth often pulls owners out of their current role with a business and into numerous roles over the year.
New business owners often take calls, contact suppliers, help with marketing – and so much more.
However, in five years, your business projection will be a lot different. So, where do you want to be in five years? You can determine this by asking yourself a few questions:
- What role do you want to have in the business?
- Will you remain hands-on, or will you delegate most of your tasks to others?
- How many hours a week do you want to work?
Of course, you can add financial projections into the mix for your business forecast. It’s fun to analyze financials for a data-centric person. Plus, financials will help you understand where your salary will be at the end of this five-year plan.
A 5-year business projection is a tool that you can leverage to reach your business goals whether your business is new or has been around for twenty years.
You can start executing a strategy to meet your business projection goals when you have the answers to the questions above. So, go ahead and take the time to review these questions and your answers to them.
You can then chunk your five-year projection down into a smaller, 12-month plan. This can reflect the goals you need to reach and actions you need to take to meet your five-year projection.
You can also use your plan to:
- Identify issues in your business that impede growth
- Reduce spending waste
- Make informed financial decisions
- Improve cash flow
- Make internal changes needed to meet your goals
Desire some help in building out a plan for your business? Click here to schedule a 21-minute call to discuss business planning with our team.Tags: business projection