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Validating the Vision

The eureka moment for any small business is not that you have found a gap in the market but that you have found a market in the gap.

This blog post is about validating your fantasy.  You’ve planned the story, you have found that gap, you have created a vision for the future underpinned by the values that motivate you and the team that is going to deliver the outcomes, you have even considered the growth stages and resources needed.  Now is time to ensure that there is a sustainable market in that gap.

I have written two whole paragraphs without mentioning cash flow forecasting.  Don’t switch off!  This is not about boring inane spreadsheet with figures that are at best, a guess and at worst, a work of fiction in their own right.  This is the document that quantifies, qualifies and justifies your assumptions.  It is also known for the larger businesses as new project operating expenses.

The figures that populate your cash flow forecast each tell part of the story.  Just as an fiction writer will create characters with personalities that interact with others in the plot, the figures that populate your cash flow forecast will tell a story too.  If these figures do not appear genuine; if they do not interact with one another properly, the story loses its continuity and credibility.

As you start to populate the forecast, assumptions that you have made will either validate your thoughts or test you to consider other options.  The top line is the most difficult to determine – the income that you might generate from your business idea.  A topic for a future blog post.  Suffice for now is to consider whether you can legitimately justify the sales you are forecasting or have you created them based on the break even point of what it will cost you to bring the offer to your newly identified market.

overture-to-william-tell

You may also like this Will Tell metaphor.   The score for each of the instruments in the orchestra plays a different series of notes that together create an overture.  Just as each of the instruments have different parts to play in the telling of the story, the lines in your cash flow forecast will too.  If you are an auditory learner you might just appreciate the calm and the storms in this and the jubilant finale.

It would be good to get your ‘Telling’ Stories on cash flow forecasts – how they have helped you rethink your business plans – a bibliography of powerful illustrations may help to elevate the cash flow forecast to its rightful position in business planning.

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