Forecasting for Your Business

Looking at the past and making a game plan for the future. Use that experience to forecast what may happen in the new year. While there are several variables that can impact the forecast in both the positive and the negative, having a plan either way will help you respond.

In my experience, businesses who start a new fiscal year at the new year start the forecasting process in the summer. Have you thought about your 2014 goals, objectives, earnings and expenses yet? To get started, here are 5 areas to think about as you forecast for a new year.

Taxes

If you pay quarterly taxes, your estimates are typically based on the previous year’s earnings. However, if you earn more throughout the year, you need to ensure that you are paying more if you need to. If not, you will be hit with another huge tax payment on top of those quarterly payments.

Make sure you understand what your tax bracket is. Let’s say it’s 20%. When you pay your quarterly taxes also take that time to do an earnings review. Ensure that your taxes paid (and to be paid) will meet that 20%. If you are on target for earning more and move to a higher bracket, adjust accordingly so you aren’t hit with one big bill during tax time. Not fun!

Staff/Contracting

If you have others who work with your business, determine what the upcoming year’s staff or subcontracting expenses will be. Do you have certain margins you want to achieve before paying others?

Perhaps you’re like me and enjoy publishing but also want quality of life so the margins may be less than someone who is running a site solo. Whatever the case may be budget for the expenses and analyze regularly to determine if the profit (and quality of life) margins are where you intended them to be.

Site Development

Since we are web entrepreneurs, this is applicable. What types of development do you want to focus on in the new year? That cost money and you need to budget accordingly.

Consult with a good designer/development company that will not just “do what you tell them to” but who will also act as a thought partner on your long-term vision. They can help you come up with a phased approach for implementation according to your budget.

With many niches becoming crowded and even more competitive, your site is more than just a design. It’s an experience for your reader and unique development can take it to the next level. Don’t just tweak to “tweak” things. Have a long-term strategy for what you want your site to become.

Marketing Campaigns

Perhaps you want more traffic or to capture a different audience demographic, marketing and advertising can help in this area. Always have a goal for whatever marketing avenue you choose. Is the goal to increase traffic? By how much? Is it to gain new subscribers? By how many? Determine what the goals are for the ad placement or campaign so you’re not just throwing money away.

Measure the results after the campaign ends to determine if it was a success. Perhaps the next time you implement a similar approach, a few tweaks could be made for it to be even more successful. Learn from everything you do (the good and the bad).

Business Events

What conferences or continued learning are scheduled for the next year? Look at the events and determine which ones are a fit for achieving your business goals. If it’s networking, select a conference that is totally about networking. If it’s learning about helping you become a better business owner, consider the Digital Colab event in 2013. 

Consider selection of these events like you would if you were working for someone else. Use each as an opportunity to grow, develop and stretch your current skill set.

Potential Income

Break down your income by categories. For example, my income is entered with several in mind:

• Affiliates
• Referrals
• Ad Network
• Advertising
• Consulting
• Sponsored Campaigns

Add to this if you have others. Whatever your categories, take this a step further to see what you earned the past 12 months in each of those areas. Will any factors affect the earnings in the positive or negative for the new year? As you are looking at your expenses, this is imperative to go through.

Perhaps you will focus more efforts in the new year on consulting. Create a strategy for how you plan to implement this. What do you anticipate the earnings to be? Use that as a forecast for consulting income for the new year.

While there are certainly other variables in forecasting for your business, those are a few to get you started as you plan to look ahead and help your business achieve even more!

What other items do you consider for forecasting each year?