Now that you’ve gotten revenue looking exactly like you want, it’s time to set up your projection for those expense items. As you go through your expense projections, keep 2 things in mind. First, are my numbers conservative. In other words, in the face of uncertainty, have I somewhat erred to the high side of the cost amount. For example, if I ask for an insurance quote and the agent gives me a number of $753 per month, to be conservative, I would round that number up to $800. Second, do the final numbers make sense to me? If my employee cost number comes out to 5% of revenue in the first 6 months, that result does not make intuitive sense. Something is wrong and must be revised.
Here are some tips as you create your individual expense items:
Employee costs (don’t worry, we’ll explain the *** at the end of the post)
