Our company has been asked to produce a financial forecast. Normally you would use data from similar businesses in the same industry. But, how can we do this when our business model is different from our competitors' business models?
How can a business produce an accurate financial forecast for a startup? Where is the reference point? Since it's a startup, you're not going to know your growth rate from year to year.
The formulas I use for my personal site are:
Projections are not necessarily expected to be accurate, but they should clearly set out the assumptions used to calculate the numbers. For revenue especially, is can be very useful to set out the price(s) and number of units expected to be sold per period, since that will make you plan how that can be achieved. That in turn will help you calculate the marketing, sales and G&A costs will have to be covered before the revenue comes in. That tells you about how much working capital you will need. Making your revenue assumptions clear will also help you adjust your forecasts as you go along, which is a great management process.