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Chapter 8. Avoiding Expensive Mistakes > Making Financial Forecasting Work for ...

Making Financial Forecasting Work for Your Home Business

Don't let the phrase ”financial forecasting” fool you. You aren't as large as Wal-Mart or IBM, so we aren't going to go to the lengths companies that size might need when they perform financial forecasting.

Look at the two words again—financial, as in having to do with money, and forecasting, as in predicting what will happen in the future (or what is most likely to happen). That is all we are doing—working through a set of assumptions and goals so that you have some idea how much money will come in and roughly when it will arrive. When you were employed, this was relatively easy. You knew what day you got paid—perhaps even the hour that your paycheck hit your bank account and was ready for withdrawal. Based on that, you paid certain bills, or withheld others. You made purchases (or not). You gave your kids permission to spend money (or not).


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