Sage Advice UK

How to estimate figures for your business plan

Outsourcing is a process that takes work and planning to get right

Creating a business plan brings some specific challenges, especially around predicting cash flow, sales and costs. How can you get accurate figures for your plan when you’re starting from scratch?

Here’s some tips on estimating the financials for your business plan, to ensure it’s as useful as possible.

Business plan financials

There are several areas that you’re likely to need for your plan. These are:

How to estimate your figures

Many people feel intimidated by the financial side of business planning. Jennifer O’Toole, Senior Partner at accountancy firm Thomas R Dixon, acknowledges that “it can often be difficult to predict sales & costs if you have nothing to work from but it’s not impossible.”

Remember that it won’t be perfect, but if you can estimate fairly accurately it will be helpful – and can save any nasty shocks later. So where should you get the data? Jennifer says, “Look for information in the public domain such as competitors’ accounts to give you examples of sales/costs/ratios that are relevant to your market”.

You can access these via websites like Company Check, which allows you to download up to 100 sets of company accounts for free each month.

What to focus on for each section

Once you have an idea of where to go for some raw data, you’ll need to begin to apply the figures to your prospective business.

Key things to consider when calculating your… sales

This is a key measure for your business and its success. Your sales forecast should show a month-by-month breakdown for the next 12 months and then an annual overview for the two years following.

There are a number of ways to calculate your sales but the following approach can be useful:


Every business has costs, either to produce the products, to buy in materials or to manage overheads. You need to estimate these costs in your plan.

Your costs should have a month-by-month breakdown for the next 12 months and show annual figures for the two years following.

…cash flow

Your cash flow forecast will show when the money comes in and goes out. Once you have your sales and costs figures, you’re part of the way there. However, do remember:

Once you have that information, you can create your monthly cash flow forecast for the next two years.

…and profit and loss

This will show all of the income and expenditure for your business and should cover at least two years. In addition to your sales and costs data, it will show any income other than sales, together with costs such as marketing, fees, salaries, travel, rent, insurance, etc.

Keep it realistic

Some business plans contain figures that are clearly unachievable. If you’ve watched Dragons’ Den you’ll see that this can be a common scenario. Most entrepreneurs are optimistic people, so they can get carried away with their numbers. It pays to err on the side of caution as the income pays for your day-to-day living expenses and the future of your business.

Jennifer says, “Be realistic about your abilities and that of your team. It can often be demotivating to set targets that are unobtainable; that said you need to set goals that ‘raise the bar’.”


  1. You won’t capture the whole market
  2. It takes time to build up a business
  3. You won’t win all work you pitch for

Look at your figures again and ask yourself if they are achievable. If you’re unsure, your accountant may be able to offer some advice.

Getting the finance in place

Of course, access to good figures also gives you an indication of how much capital you might need and how long it will be before your business is profitable.

Some businesses “bootstrap” their launch and make use of owners’ savings to get started. For others, they will need funding.

If you are looking for investment, it’s important that you know what your numbers are – not only what you’re looking for but also how the money will be used and when investors can see a return. You should know your figures inside out as this will show confidence and an understanding of your business.