When planning your budget for the upcoming fiscal year, one of the most important tasks is forecasting revenues.
This involves projecting how much money you can expect from existing clients, upsells, and new business. If you’re an ad agency owner feeling overwhelmed by this process, this blog post will walk you through the steps to forecast revenue and plan a budget that works best for your business.
Projecting Revenue From Existing Clients
The first step in forecasting revenue is projecting how much money you can expect from existing clients. Start by determining if they will renew their services with you and if so, how much it will cost them. Will they pay the same amount as last year or more/less? Consider any upsell opportunities as well—for instance, are there additional services they might be interested in that could increase their spend?
Forecasting Revenue From New Business
Next, turn your attention to new business. To start, consider your named pipeline—these are prospects that have already expressed interest in working with you. You can then estimate whether or not you’ll win them and for what month and how much money they’ll commit to spending on services. Finally, factor in unnamed prospects—those leads who have yet to make contact but may still be interested in working with you. Look at past performance from similar leads to determine an estimate of how many clients by service by month you can expect to win over the next year.
Add together your estimates for existing clients and new business—this should give you a solid projection of the total revenue you can anticipate bringing in during the upcoming fiscal year, as well as your revenue by month.
Forecasting revenue is an integral part of creating a successful budget for the upcoming fiscal year as an ad agency owner. Start by projecting revenue from existing clients and any upsells they may be interested in pursuing; then move on to estimating potential income from both named pipeline prospects and unnamed leads (using lead scoring). Add these numbers together for an estimate of total anticipated revenues during the next 12 months so that you can create a budget that works best for your business! With careful planning and clear expectations of what kind of revenue your agency will bring in each month throughout the year, budgeting becomes less daunting and more manageable. Good luck!