As December comes to a close, business owners across every industry start reflecting on the year’s outcomes. But if you’re running a business in the $1–5M range, reflection isn’t enough. What you need is a clear, strategic roadmap to turn year-end insights into action.

Enter: forecasting.

Not just a budgeting exercise or a cash flow guess—forecasting, when done well, is one of the most powerful tools you can use to lead with confidence. It translates your vision into numbers. It connects your goals to reality. And it helps you step into 2025 with a plan that aligns people, priorities, and resources.

Let’s walk through how to use this year-end moment to forecast with clarity—and make smarter, more strategic financial decisions in the new year.

Step 1: Reflect on the Financial Story of 2024

Before you map out next year, take a CEO-level look at what this year revealed.

Here are a few reflection questions that go deeper than profit and loss:

• Where did revenue actually come from? Break it down by service line, product, or offer. What was most profitable—not just highest grossing?
  
• What expenses expanded beyond expectations? Look at categories like payroll, contractors, subscriptions, and software.
  
• How closely did your actual financial outcomes align with your goals? Were forecasts, hiring plans, and tax projections accurate—or off by a wide margin?
  
• Did your financial strategy feel reactive or proactive? Did you make decisions based on reports and forecasts—or gut?
  

This level of review offers more than hindsight—it provides forward-focused clarity on what needs to shift in your approach.

Step 2: Ditch the “Percentage Buckets” (And Build a Real Forecast)

You’ve likely seen the advice: set aside 50% for pay, 15% for taxes, 25% for operations, etc. While that kind of model can work for micro-businesses, it doesn’t scale well—especially in a business with a team, productized services, or variable expenses.

Instead, build a dynamic forecast that models the specific financial levers in your business:

1. Revenue Projections by Offer: Don’t just lump all income together. Project revenue by product, service line, or department so you can assess profit drivers and capacity.
   
2. Direct Costs and Labor: These scale differently depending on fulfillment models. Break out COGS or delivery-related labor separately.
   
3. Operating Expenses: Itemize recurring costs, assess vendor increases, and plan for software upgrades, consulting, or infrastructure needs.
   
4. Team Compensation & Hiring: Include projected salary increases, new hires, and contractor shifts. Labor is often your biggest investment—forecast it intentionally.
   
5. Owner Pay and Distributions: Instead of using what’s left over, build these into the plan.
   
6. Cash Reserves & Profit Allocation: Forecast quarterly targets for saving, reinvesting, or distributing profits.
   
7. Tax Planning: Estimate quarterly tax liability based on forecasted profit and ensure funds are allocated monthly.
   

With this structure, you create a forecast that evolves with your business—not one that boxes it in.

Step 3: Build a 12-Month View (And a Rolling 90-Day Cash Plan)

Your 12-month forecast gives you visibility. But your rolling 90-day cash flow gives you real-time agility.

• The forecast helps you plan: “What does next year look like if things go as expected?”
  
• The 90-day cash plan answers: “Can we meet obligations right now if income fluctuates?”
  

At the $1–5M level, these dual views are essential. You might be adding team members, launching a new offer, or expanding operations. You need both the big picture and the day-to-day controls.

💡 Pro Tip: Pair your forecast with scenario planning. What happens if revenue is 10% below goal? What if expenses increase unexpectedly? Planning for best, worst, and expected cases will help you lead with data—not emotion.

Step 4: Set Strategic KPIs to Monitor Monthly

Once you’ve built your forecast, don’t let it collect dust. The value of forecasting isn’t in the spreadsheet—it’s in using it.

Choose 3–5 key financial indicators to review monthly, such as:

• Gross margin by offer
  
• Net income vs. forecast
  
• Cash on hand vs. burn rate
  
• Owner pay vs. plan
  
• Revenue retention or churn rate
  

Tie these to your leadership calendar and make them a standing part of your financial rhythm. You don’t need to micromanage the books—but you do need to keep your eyes on the metrics that reflect real momentum.

Step 5: Use the Financial Wellness Assessment to Ground Your Forecast in Reality

Forecasting is only as strong as the assumptions behind it. If your current numbers aren’t clean or you’re unclear about how to interpret them, the Financial Wellness Assessment can help.

This isn’t a plug-and-play template. It’s a strategic deep dive tailored to you and your business.

What’s Included:

• 20-Minute Discovery Call: Clarify your goals, revenue model, and what success looks like in 2025.
  
• 90-Minute Independent Review: I analyze your books, P&L trends, cash flow, and tax positioning.
  
• 30-Minute Feedback Session: Get a strategic roadmap for improvements—plus answers to the questions you didn’t know to ask.
  

You’ll walk away with:

• Clarity on your real financial performance
  
• Red flags and missed opportunities you can still fix before Q1
  
• Guidance on what your numbers are actually saying—and how to use them
  

Most importantly? You’ll have confidence in the financial decisions you’re about to make.

Final Thought: The Best Time to Forecast Was Last Quarter. The Next Best Time Is Now.

Forecasting isn’t about predicting the future—it’s about preparing for it. Your business deserves a CEO who leads with data, not guesswork. And your team needs a leader who sees what’s coming—not just what’s happening.

Let 2025 be the year you lead differently.

If you’re ready to align your goals with a financial plan that actually works, secure your spot today.

Book now to find out if the Financial Awareness Assessment is right for you.