Can I Make Money? Building A Financial Forecast
Before using your hard-earned cash to start a new business, buy a business or improve your existing business it helps to know if putting your cash in the bank would reap better rewards. Learn how to model your business performance by creating a simple pro-forma income statement.
After completing this workshop, you will have a better understanding of boxes #8 and #9 of the Business Model Canvas, "Cost Structure" and "Revenue Streams", as explained by SCORE mentors.
Why Create a Pro-Forma?
If you plan to start a new business:
- How much money will you spend before opening the doors?
- How long before you start making money?
- Which products/services will make you successful?
If you plan to buy a business:
- Historical results are in the financial statements.
- Where are the strengths and weaknesses?
- Going forward, how will you build on the strengths and eliminate weaknesses?
If you want to improve your existing business:
- Change your business model to make more profit.
- Perform scenario planning in times of uncertainty.