INSIGHT

How to Make Financial Projections in 5 Effective Steps

Howie Lau • February 10, 2026

Services: Financial Planning & Analysis

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You’ve built something remarkable. Your company has momentum, your team believes in the vision, and you’re ready to scale. But when investors, lenders, or potential partners ask about your future, numbers tell the story better than words ever could. 

Financial projections aren’t just spreadsheets filled with hopeful estimates. They’re part of financial planning & analysis, including your growth narrative translated into the language that stakeholders understand best.  

5 Steps to Make Financial Projections That Demonstrate Growth 

This article will walk you through how to craft projections that demonstrate your business acumen while painting a compelling picture of where you’re headed.  

1. Start With Your Strategic Foundation 

Your projections should reflect your actual business strategy, not generic industry benchmarks. Begin by documenting your key growth drivers. Are you expanding into new markets? Launching additional product lines? Increasing prices based on enhanced value delivery? 

Each assumption you make should connect directly to a strategic initiative. When you project a 40% revenue increase, you need to explain exactly how you’ll achieve it. Maybe you’re hiring three salespeople who will each close $500K in their first year. Perhaps you’re opening a second location that will capture an underserved customer segment. 

The numbers gain credibility when they’re tied to specific actions you plan to take. 

2. Build From the Bottom Up 

Top-down projections start with a revenue goal and work backward. Bottom-up projections start with granular details and build upward. The most effective forecasts use both: top-down to set direction, and bottom-up to test whether the plan is achievable. 

Break down revenue by customer segment, product category, or service type. In a SaaS business, model subscription tiers separately and account for conversion rates, churn, and expansion. In retail, forecast by location and incorporate seasonality and traffic patterns. 

This granular view forces disciplined thinking about how the business actually operates. It helps surface risks early, creates alignment between strategy and execution, and equips you to answer detailed questions from investors who want to understand not just the outcome—but the drivers behind it. 

3. Address Your Cost Structure Honestly 

Revenue projections often get the spotlight, but your cost assumptions matter just as much. Many businesses underestimate how expenses will scale as they grow. 

Map your costs into fixed and variable categories. Fixed costs stay relatively constant regardless of volume. Variable costs increase with production or sales activity. Understanding this distinction helps you model profitability accurately as revenue grows. 

Don’t forget the investments required to support growth. New equipment, additional staff, expanded marketing budgets, and upgraded technology infrastructure all require capital. Your projections should show when you’ll need to make these investments and how they’ll impact cash flow.  

4. Create Multiple Scenarios 

No one can predict the future with certainty. That’s why sophisticated financial projections include multiple scenarios. 

Your base case should represent your most likely outcome given current conditions and reasonable assumptions. Your upside case shows what happens if things go better than expected. Your downside case demonstrates how you’ll handle challenges. 

These scenarios aren’t just about changing one percentage. Each scenario should tell a coherent story with interconnected assumptions. If your upside case assumes faster customer acquisition, it should also reflect the increased marketing spend required to achieve those results. 

Multiple scenarios show stakeholders that you’ve thought through various possibilities. They also provide a framework for monitoring performance and adjusting your strategy as actual results unfold. 

5. Make Your Presentation Tell the Story 

Raw data doesn’t communicate effectively. You need to present your projections in ways that highlight the narrative. 

Use visualizations to show growth trajectories, margin expansion, and cash flow improvement over time. Create dashboards that let viewers quickly grasp your key metrics. Include commentary that explains the “why” behind the numbers. 

Focus on the metrics that matter most for your industry and growth stage. Early-stage companies might emphasize customer acquisition costs and lifetime value. Established businesses might highlight margin improvement and return on invested capital. 

Learn More About our Financial Planning & Analysis

Partner With BPM to Help Craft Your Financial Projections

Crafting compelling financial projections requires both technical skill and strategic thinking. At BPM, we help businesses translate their growth vision into credible, well-structured financial narratives that resonate with investors, lenders, and other stakeholders. 

Our team works alongside you to build projections grounded in your actual business model and strategic priorities. We bring experience across industries and growth stages to help you present your story with confidence. To discuss how we can help you tell your financial story effectively, contact us.