Indeed, those revenue forecasts are extremely valuable. They’re useful both for securing partners externally and for developing your growth strategy internally.

In your external relationships, revenue forecasts let your investors and lenders see where the whole endeavor is headed. On the inside, they help your leaders plan your growth trajectory and make key decisions as you move ahead.

But how did those businesses determine the numbers? And if you’re trying to develop your own revenue forecast, where should you start?

Of course, there are many different approaches, but the underlying principles are the same. Some of the key steps you can use to forecast your future revenue are described below.

Start with your business plan

Start with the basics — your business plan. With your overarching strategy in mind, take a close look at your industry, your place within it, and your business model.

Then, use that strategy to create a calendar that walks through the next several years quarter by quarter, displaying how your company’s priorities, activities, and tactics will change.

Just looking at this high-level overview will give you a good sense of where your periods of growth may occur, and what it will take to get there.

Ask questions about your future business activities

With that detailed calendar in front of you, it’s time to start asking some key questions about the ups and downs of your future business activities. You’re starting to forecast now! Consider the following points.  

What are your initial expenses in the early years?

Your first consideration should be whether the early stages of running your business will include a lot of capital costs, like equipment. If so, then you should assume it will be a few years before your revenue stream makes it into the black zone.

Luckily, costs for equipment and supplies can be predicted pretty accurately. Payroll is equally predictable. It’s the other, less-obvious costs such as insurance, legal fees, regulatory fees and rent that somehow grow far beyond what you ever expected. It’s a good idea to take your original estimates and double them.

What are your sources of revenue?

Your second question should tackle the money coming in. How much money should you expect to make from your products or services?

Investors love businesses with recurring revenue, such as monthly software subscriptions or phone payment plans. This type of revenue offers a certain amount of stability when creating financial forecasts.

Of course, the most successful businesses have several revenue streams. While recurring revenue is ideal, generating other revenue at predictable intervals is pretty great, too.

Are there quarters or certain periods when you can drive more revenue?

Depending on your business, perhaps you know that you can bump up your sales in a particular season, or in association with a major industry event or conference. But if this isn’t the case, focus on maintaining consistent demand throughout the year. Seek out clients who require work on a regular basis — every quarter, or even every month. And take care not to rely too much on one big client or even one sector for your business; strategic diversification will help you get through industry downturns or unexpected payment delays.

Get the industry data

The business landscape changes constantly according to factors beyond your control. As such, your path forward also depends on what the competition is doing.

Now that you have your own path mapped out, it’s time to look around and add data from outside your organization. While small businesses generally don’t publicize their revenue, there are other ways to get your hands on valuable industry data. Start by checking:

• Industry-specific organizations
• National statistics departments
• News outlets
• Other sources of public information

You can also ask your local business incubator or library, as they often work with entrepreneurs and small businesses and have a sense of typical revenue patterns.

Plan for conservative and aggressive scenarios

As you plan the way forward for your business and the industry space you’re competing in, develop two different scenarios — a conservative case and an aggressive case.

While you may think it’s confusing to create multiple revenue forecasts, there’s no reason why you shouldn’t. In fact, there are a few key reasons why you should:

• Having both forecasts in your arsenal helps with your overall strategic planning.
• The best business plans strike a healthy balance between being realistic and chasing dreams. Ideally, you want to do both — tackle the real obstacles in your path while pursuing a grander vision.
• It makes you look better in the eyes of your potential investors. Producing revenue forecasts for both conservative and aggressive scenarios shows that your company planning is sophisticated.

Forecasting involves ongoing expenses, too

It’s tempting to focus only on the money coming in. But you can’t do that, because that’s not how running and growing a business works. You must also account for the expenses that drive your revenue generation. For instance:

• Does generating more revenue require hiring a larger sales team?
• Does acquiring more customers mean that you need a more sophisticated customer management system?

Whatever the case, don’t forget to account for those additional expenses.

Revise your forecast regularly

Once you’ve completed your revenue forecast, you just have to focus on putting in the months and years of hard work, right?

No! It’s important to revise your forecasts regularly based on the new data you acquire from your activities. For instance:

• Did you reach some milestones faster or slower than expected?
• Were your insurance and legal expenses higher than you predicted? (hint: they likely will be!)
• Are you gaining efficiencies and economies of scale?
• What have your annual revenue patterns looked like? What about your rates of growth?

It’s imperative that you revisit your growth plan with the most accurate data. Use the patterns you observe to forecast your future performance.

Create your planning toolkit

As a small business, you’re immersed in your daily to-do list. Most days it’s hard enough finding time to come up for air, never mind developing a revenue forecast. Nevertheless, it’s important to keep one eye (or at least part of one eye) on where you’re headed. 

Keep your head above water by investing in technology solutions to better manage those day-to-day responsibilities. For instance, a CRM that integrates with your accounting software helps you minimize double data entry and follow up with customers more efficiently, all while empowering you to grow your sales.

It’s never too early to start forecasting your future revenue. And the more you simplify today’s tasks, the more time you can spend developing tomorrow’s strategies.

The post How to Forecast Your Small Business Revenue appeared first on Method.

Ask any small business owner about their goals, and you’ll learn that many aspire to grow their businesses. But what are the steps they need to take in order to get there?

Of course, every industry has its own secrets and processes for turning your small business into a bigger one. But if you’re interested in growth, there are some best practices you should keep in mind no matter what you’re selling or who your customers are.

Have a vision for your success

Having a “vision” sounds a little new-agey, but it’s the real deal.

Let’s say you’re currently a small team of 1-2 people with just a few dozen customers, but your 10-year vision looks much grander — say, 50 employees and 5000 customers. By setting your goals, writing them down, and keeping track of your progress, you will eventually create a realistic picture of what’s possible and where you’re headed.

Having a clear vision for your future also helps you and your team make those tough decisions. For example, when considering whether to add a team member, ask yourself how that new person will advance your progress toward your 10-year milestones. Similarly, if you’re considering introducing a new product, ask yourself how that product takes you closer to the company you want to be in the future.

Being explicit about your goals for your business will keep you moving forward in the right direction, no matter what decisions you need to make in order to get there.

Stay focused on your core business

It’s easy to get distracted by shiny new projects when really, you should be sticking to your core competencies — the things you’re best at.

Most companies, even the big ones, are known for one or two key offerings. For instance, Google is best known for its search engine and email platform, even though it has come out with additional products like Google Glass and Google Home. And Coca-Cola, for all of its flavored varieties, is still most famous for the “classic” Coke taste.

Here’s the lesson to remember: even if you want to try something new, never let go of what already works. Your new ideas shouldn’t distract from the core business model that makes your company unique

If you do decide to diversify, listen carefully to customer feedback and keep a sharp eye on industry trends. And always remember — if your core business is already profitable and growing, embrace it and stay focused so that healthy revenue stream doesn’t wither away.

Hire talented people

Throughout your growth journey, you’ll hire a variety of people. And in the recruiting process, you may encounter a candidate who’s more talented than you. When this happens, you should embrace that person, even if the prospect makes you uncomfortable.

Here’s the thing: your growth strategy is already limited by your own shortcomings. The only way forward is to hire people who do stuff better than you. It’s all about building a team that can complement your weaknesses with their own strengths.

There’s one catch — talented people cost more. But as a growing company, there are many ways you can offer them value without necessarily seeing a bigger drain on your bottom line. One-time signing bonuses, stock options, annual cash top-ups commensurate with performance, and other incentives are common ways of rewarding employees besides offering larger salaries.

Remember the long game

If you have a 10-year vision, then you will undoubtedly have to make sacrifices along the way. Staying devoted to a long-term plan typically means bypassing some of the easy fixes that present themselves in the short term.

For instance, you may choose to hire an expensive subject matter expert, rather than a more junior professional, because you know the expertise they contribute will ultimately boost your revenue.

Or maybe you’ll ignore a trend that’s prevalent today in order to focus on building something stronger for the future. That’s what Apple did when it created its iPhone more than a decade ago, instead of building yet another one of the typical flip-phones of the time.

Being poorer in the short-term (in order to become richer in the long-term) takes discipline and vision. But remember that you don’t have to be alone while taking your business to the next level. Aim to recruit a team of trusted and patient advisors who are willing to support your way forward, even if it takes a while.

Finally, remember to take some time for yourself during the evenings and weekends. This ensures that you can fully devote time and energy to your business during work hours, without burning out prematurely.

Bring it all together with the right tools

A key part of turning your vision into reality is investing in tools to support your growth. As your business expands, it’s important to have systems in place that allow your team to stay organized and work efficiently. Otherwise, you risk missing out on valuable sales or alienating the loyal customers you worked so hard to acquire. 

Luckily, a great CRM can simplify multiple processes at once, from managing your leads and opportunities to building strong customer relationships to eliminating double data entry with your accounting software.

Don’t feel that you need to wait until you’re “big enough” before investing in new tools. The sooner you implement a CRM (especially one that can be customized for your business), the more you can leverage it to promote further growth.

Growing a small business into a big business is never easy, and it rarely happens overnight. But with the right tactics and technology on hand, you can start taking steps toward your long-term goals today.

The post How to Turn Your Small Business Into a Big Business appeared first on Method.

Factor in that small business owners simply don’t have much (or any) extra time on their hands. Leisurely perusing the internet to find the latest and greatest blogs? That’s a luxury most small business owners simply can’t afford.

Luckily, others have done the legwork for you. We’ve scoured cyberspace and curated a list of follow-worthy blogs that consistently offer value, innovation, and inspiration. Here are the top 11 small business blogs that will give you the best ROI of your time.

Business Insider

Get the big picture from Business Insider. This wide-ranging blog covers the latest in finance, tech, strategy, politics, market analysis and more, with lifestyle articles thrown in for your enjoyment (and so your marketing team can track trends.) For deeper dives, check out a BI Prime subscription to get longer-form articles delivered to your inbox.

Small Business Administration

No list of business-friendly blogs would be complete without a shout-out to the U.S. Small Business Administration’s blog. Packed with resources for small businesses of all stripes, this blog offers business news and expert advice. More importantly, the SBA provides invaluable guides covering business stages like launch, management, and growth. Here you’ll find funding and grant opportunities, information about regulatory updates, tips on how to find local assistance and a wide range of free educational resources in the learning center.

Forbes Entrepreneurs

Learn from those who’ve gone before — and succeeded — on the Forbes Entrepreneurs blog. Profiles of business owners who’ve taken their innovative ideas and turned them into reality make up the standard fare. You’ll also find the latest industry news, best practices, advice from the pros, and success stories to motivate you in your own journey.

TechCrunch

Curious about the latest tech advances that promise to make your life easier? Give TechCrunch a follow. Here, you’ll find new digital technologies, breaking business news, and gadgets and gizmos galore. Start-ups and entrepreneurs will especially appreciate this blog, with its focus on emerging tech and apps that have potential to boost your business. 

Duct Tape Marketing

For many small business owners, finding the time and resources to effectively market their business is a constant struggle. In fact, a recent survey of small business owners indicates that marketing and advertising rank second on a list of top challenges — only beaten by lack of capital. Luckily, the Duct Tape Marketing blog can help. From keyword research to content creation and more, this helpful blog covers the marketing angle and offers actionable advice you can put into practice. 

SCORE Small Business Success Blog

The name of this blog says it all. SCORE, a nonprofit organization funded in part by the U.S. Small Business Administration, is dedicated to helping small businesses succeed. Follow their blog to find practical articles related to small business creation, management, expansion and more. A network of more than 10,000 contributors and mentors from across industries provide ever-changing, relevant content. Bonus: The blog is organized so you can filter by business stage, industry, topic, entrepreneur type and more, making it simple to drill down and find the info you need.

NOLO Small Business Law Blog

NOLO’s been publishing legal guides for small businesses for decades, so it’s no surprise that their blog deserves a follow. NOLO’s Small Business Law blog answers the common questions that arise when running a small business. If you’ve ever wondered how to structure contracts or start an LLC, this blog spells out subject matter in easy-to-read language that’s (thankfully) free of legal jargon. But the NOLO blog has more value to offer; you’ll also find articles on topics like sales, marketing and more.

TaxBuzz

If you’ve got tax questions (and who doesn’t, these days) turn to the experts at TaxBuzz. With a collection of articles written by experts — CPAs, accountants and tax law specialists — this is a great place to begin your search for solutions to your most, er, taxing queries. With categories covering planning, updates, reform, healthcare, solopreneurs, city guides and more, TaxBuzz should be your go-to for basic business-related tax questions.

Seth’s Blog

If you enjoy a well-written blog post with quirky humor baked in, head over to Seth’s Blog. The brainchild of author, entrepreneur and marketing whiz Seth Godin, this blog offers an outside-the-box approach to business. With his eminently relatable writing style, Godin offers real-life anecdotes and a unique perspective to help spark your own creative problem-solving ability.

G2’s Learning Hub

As the leading business software marketplace, G2’s blog provides unique insights on every aspect of running a small business. With data on hundreds of thousands of products and over a million visitors every month, the Learning Hub is a valuable resource on topics ranging from the best tools for sales professionals to how to use social media.

Method CRM

Of course, we would be remiss if we didn’t include our own blog on this list. If you’re looking for insights into the latest industry trends, expertise on customizable software, or tips on how your organization can better serve and interact with clients, you’ve come to the right place. Packed with information for companies in all industries, our blog covers a diverse range of topics, from how to stay organized as a small business owner to why you should stop using Excel as a CRM.

In an ideal world, small business owners would have unlimited time to browse the myriad of business blogs floating around in cyberspace. In reality, your time is precious — but it still pays to set aside a few minutes each day to read posts from blogs that offer the information and updates you need. Think of it as an ongoing investment in your business’s success.

The post Top 11 Blogs for Small Business Owners appeared first on Method.

It’s about having the vision to see what’s coming, identifying the change factors, making a plan for staying ahead of the game, and inspiring your team to embrace those new opportunities.

When it comes to business, too many leaders think the game they grew up with will be the game forever. But nothing could be further from the truth — especially in today’s fast-moving, technologically-driven marketplace.

As a small business, the bad news is that these ongoing changes will hit every part of your operations. The good news is that you have the flexibility to respond.

Get ready to be nimble, forward-thinking and competitive by tackling these important changes as they arise.

Changes in employee mindsets

Your people are your most important asset. This has long been the case for every business. However, today’s workers increasingly come from a younger generation whose values, priorities and working styles are different from those of their parents. Here are two key examples.

The desire to work remotely

Take a moment to think about the traditional 9-5 office workday. Now imagine a workplace where many people do not appear at 9 am, nor do they return home at 5 pm. Instead, employees work partially or entirely remotely, and their connectivity is continuous.

Many young people enter the workforce today with the expectation that working remotely will be part of their job. It’s not hard to see why. After all, in many industries, workers have all the tools they need — including laptops, smartphones, and cloud software — to stay connected no matter where they are.

In 2019, remote working will continue to emerge as an increasingly common working arrangement. You might even choose to follow the lead of growing companies whose teams work 100% remotely, eliminating the need for a physical office.

A focus on wellness

Traditionally, people cared about salary first when considering a job, while wellness benefits and a great working environment were nice-to-have, second-place perks. But guess what? Wellness and the working environment are now a top priority for today’s workers.

Employees are now increasingly drawn to workplaces that offer:

• Full benefits for medical, dental or other health care services
• Fitness memberships, in-house gyms or other wellness incentives
• Locations that are easy to commute to on foot or by bicycle

Smart employers will realize sooner rather than later that keeping employees healthy and happy is the key to better productivity.

Changes in customer behavior

Your employees aren’t the only people looking for something different from your company. Here are two of the main factors driving changes in your customers’ expectations.

The importance of personalized communication

The era of one-size-fits-all marketing is over. Instead, companies are leveraging technology to pinpoint each individual’s preferences and send them targeted offerings. Just think about how you can log in to your Amazon or Netflix account and immediately receive a curated list of recommendations.

Customers increasingly expect this level of service from every company they interact with. For instance, when they land on your website, they don’t want to read the generic content you’ve written — they want answers that address their specific needs. Luckily for small businesses, there are plenty of apps that can help you engage with your customers in real time and deliver personalized messages.

Reliance on user reviews

It’s one of the democratizing effects of the internet — not only can people access information about your offerings, but they can also share their views on whether those offerings are worth it. Then, in turn, other people can access those views. A 2018 Bright Local survey found that 86 percent of consumers read reviews for local businesses.

Are user reviews trustworthy, accurate and fair? Sometimes yes, sometimes no. But whether a review is fair or not, it has the power to influence other potential customers, so your best bet is to address it. The most successful companies offer transparent, sincere responses to customer reviews — both the positive and negative ones — and openly commit to delivering superior experiences.

Changes in technology

As the world around your small business changes, the tools and technology you work with on a daily basis will continue to change as well. Here are just a few examples.

Wearables

In the late 2000s, many businesses started offering wearables like Fitbits to their employees to encourage physical activity and wellness. The trend has continued, to the point where Fitbit now offers a range of corporate health solutions.

In 2019, small businesses will increasingly join the movement to get their employees moving through the use of wearable activity trackers. As an added bonus, app-based activity challenges are a great way to promote connectivity among remote teams.

Privacy and cybersecurity

Protecting personal information and securing communications are regulatory priorities affecting businesses in all sectors. As a result, it’s important to stay on top of changing regulations. This may seem obvious — but the marketplace is becoming so globalized and interconnected that different regulations can sneak up on you.

Take the European Union’s General Data Protection Regulation (GDPR), which covers personal information related to individuals in the EU. If your business isn’t located in the EU, you may think this doesn’t affect you — but think again. Has an EU citizen ever downloaded a marketing resource from your website or started a free trial of your software? If so, then you’re responsible for staying compliant with GDPR.

Blockchain

Blockchain — the cloud-based technology enabling distributed public ledgers for accessible, secure data — got a lot of media attention in 2017 and 2018. But it’s not just hype. Blockchain is emerging as a serious resource, particularly for businesses needing a platform for data storage, financial transactions, or real estate or asset management.

The Big Four accounting firms have already established solid long-term plans to grow their capacity in the cryptocurrency and blockchain space. It’s only a matter of time before blockchain starts to impact smaller businesses as well.

Meeting small business changes head-on

The trends described above aren’t just passing fads. They’re part of the business landscape, and this means small business owners must embrace them in order to stay competitive.

By empowering your employees, enhancing your customer experience, and adopting new technology, you’ll be well-prepared to tackle any other changes that come your way.

The post Changes Faced by Small Businesses in 2019 appeared first on Method.