Start Your Business Week by Week, 2nd Edition

The Profit Forecast

The first place to start is with what bankers, accountants and investors call a Profit and Loss Forecast – but, being entrepreneurs, we’ll be positive and focus on what we want to achieve and call it a Profit Forecast. This shows what sales you expect to make and at what price, what the cost of these sales will be (raw materials etc.) and what your overheads will be (what you need to pay just to keep the roof over your head). Once you subtract the costs from the sales, you’ll have your profit.

It’s easiest to do this on a computer spreadsheet. Initially, do the forecast for 12 months, with one column for each month’s forecast figures. We’re going to assume at this point that you won’t register for VAT, though this may change ...