Driving Without Headlights? That’s Your Small Business Without Projections

Marcela Shine
Jul 15
4 min read

Updated: Sep 30

Starting a Business: The Importance of Mapping Out Your Projections

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Starting a business is exciting—no doubt about it. But too many small business owners skip one critical step: mapping out their business projections.

Why? Because most of us have no idea where to start. No one teaches you this stuff. If you’ve never applied for a loan or pitched investors, it’s easy to ignore. I certainly did—until I was fundraising and suddenly had to produce a full set of financial projections. It instantly became my least favorite job.

Totally normal. Totally fixable.

A lot of businesses start as side hustles to test an idea. That’s a great way to figure out how long it takes to make money and sell your product or service. But here’s the trap: most people never go back to plan for long-term financial health.

Ignoring projections is like driving at night without headlights. You might be moving forward, but you have no clue what’s coming.

Let’s Break It Down

Here’s how to think about projections without feeling overwhelmed.

What Are Business Projections—and Why Should You Care?

Business projections are educated guesses about your future revenue, expenses, and profits. They matter because they help you:

Understand your real potential – Gives you a clear target to aim for.
Impress investors and grant reviewers – Shows you’re serious and prepared.
Avoid financial disasters – Catch cash flow issues before they happen.
Set goals you can actually hit – No more throwing numbers in the air and hoping they stick.
Make smarter decisions – Hiring, marketing, pricing—it’s all easier with real numbers.

The 3 Business Killers Projections Help You Avoid

Running Out of Cash Too Soon
Cash flow is the number one reason small businesses fail. Even with great sales, you can sink fast if you don’t plan for expenses, seasonality, and slow periods.
Underpricing Your Products or Services
Too many owners set prices without factoring in costs, overhead, and profitability. Projections force you to calculate your true costs so you’re not working for free.
Scaling Too Fast (or Too Slow)
Hiring too soon? Overspending on inventory? Not reinvesting when you should? Projections help you time your growth so you don’t overextend or miss key opportunities.

How to Start Projections (and Stop Avoiding Them)

Hate math? Don’t worry. Projections don’t have to be complicated.

Estimate Your Revenue
Start with a three-month view instead of a full year. It’s easier to spot trends and adjust as you go.
Think About Seasonality
Will certain months be busier or slower? Use what you learn in those first three months to build out a bigger picture for the year.
List Your Expenses
Break them into:
Fixed costs (rent, salaries)
Variable costs (marketing, utilities)
Cost of goods sold (COGS) and startup expenses

Projections Aren’t Just for Investors. They’re for You!

Think projections are only for loans or investors? Think again. They’re for you—to help you run a smarter, more sustainable business.

And you don’t have to figure it out alone.

Copy & Paste This ChatGPT Prompt to Build Your Projections

"Act as my small business coach and guide me through creating simple 3-month financial projections. Ask me *one question at a time, explain why you’re asking it, and wait for my answer before moving on. Keep your explanations friendly and easy to understand—no finance jargon. Don't forget to tell me what things mean, for example, COGS and other terms that I need to learn as we go along.

Start with my startup costs (these often happen before you even make your first sale):

Have you already paid for any one-time startup expenses, or do you still need to? (Examples: LLC formation, business licenses/permits, initial inventory, equipment, branding, website setup, marketing launch, software setup.)
How much did or will each of these cost?

Then learn about my business and sales:

What product or service do you sell, and how do you sell it? (Online, in-person, or both?)
Am I running this from home or do I pay for a space?
How much do I charge per product/service?
How many sales do I realistically expect in a typical month?

Next, help me think about timing and trends:

Do I have busy and slow months? Which ones?
Are there any factors (seasonality, events, trends) that could affect sales?

Now walk me through my ongoing expenses:

What are my fixed monthly costs? (Rent, salaries, insurance, subscriptions.)

10. What are my variable monthly costs? (Marketing, supplies, utilities—things that change.)

11. What’s my cost of goods sold (COGS) per product/service?

After gathering my answers, calculate:

My total projected revenue for the next 3 months
My total expenses (startup costs, fixed, variable, COGS)
My projected profit or loss
Any potential cash flow issues I should watch for

Finally:

Remind me to put these numbers into a Google Sheet so I can track them over time.
Show me how to expand my 3-month projection into a minimum 6-month projection so I can see a clearer picture of my business trends."*

Your business deserves more than back-of-the-napkin math. Join our community to get the tools and coaching you need to plan with confidence and grow on purpose.

The Road Ahead: Embracing Your Projections

As you dive into your projections, remember that they are not set in stone. They are living documents that can evolve with your business. Regularly revisit and adjust them based on actual performance. This practice will help you stay agile and responsive to changes in your market.

Conclusion: Take Charge of Your Business Future

In conclusion, mapping out your business projections is not just a task; it’s a vital part of your entrepreneurial journey. By understanding your financial landscape, you can make informed decisions that propel your business forward. So, take a deep breath, grab a cup of coffee, and start planning your future today.

☕ Questions? Stop by our weekly AI community office hours. Check the calendar in the member forum. Coffee not included, but highly recommended!