I love Christmas. I love the music, the lights, the time spent with friends and family, and of course the significance of the holiday for those of us who attempt to follow Christ. The crowded streets and stores I could do without, but the good comes with the bad and all in all, it’s a joyful time of year for most of us.
We’ve been working on our budget for LoCo Think Tank for 2019, forecasting continued growth in chapter membership and a couple more chapter launches projected. With our business model as a membership organization, it’s a fairly simple exercise - we know the revenues from each member, and the ratio of LoCo Facilitator expenses to that top line, and then we have our overhead expenses for office rent and tech spending, marketing and meals, figure in my meager salary and intern wages, and viola! We can project our profitability on a monthly basis, and budget when we can finally get a good office printer and Jill can have her inkjet back at home! (Looks like probably April babe…)
Forecasting is something small business owners tend to spend too little time on - to my chagrin and to their detriment. By definition, to forecast is to calculate or predict some future event or condition as a result of study and analysis of available pertinent data. Weather forecasting and financial forecasting are the two main areas of application. But these two are actually very different, because in the case of weather there’s really nothing you can do to change it (at least in the short run - this isn’t a climate change article), whereas in financial forecasting the very act of forecasting, and the activities undertaken along the way, significantly impact the outcomes.
Let’s unpack that a bit, shall we?