Forecasting for Growth: A Simple Framework That Works
September 18, 2025
•8 min read•Financial Planning
Published September 18, 2025
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TL;DR
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Rolling 12-month forecast updated monthly20-30 mins/month to maintain
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Weight pipeline at 70-80% probabilityNot 100%
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Track cash timing, not just revenue30-60 day payment delays
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Three sections: Revenue, Costs, Cash Flow2 hours to set up
💡Quick reference summary. Continue reading for comprehensive analysis and context.
Most agency founders don't forecast because they think it's complicated, time-consuming, or pointless ("things always change anyway"). But here's the truth: forecasting isn't about predicting the future perfectly, it's about making better decisions today.
Without a forecast, you're flying blind. You can't answer basic questions like:
💼Can we afford to hire someone next quarter?
⚠️What happens if we lose our biggest client?
💰Do we have enough cash for that new tool?
📈Are we on track to hit our revenue goals?
A good forecast gives you the confidence to make these decisions and the early warning system to avoid disasters.
The Rolling 12-Month Forecast
The best forecasting framework for agencies is a rolling 12-month model. Here's how it works:
How Rolling Forecasts Work
1
Rolling: Every month, update the forecast and add a new month to the end
2
12 months: Long enough to plan ahead, short enough to stay realistic
3
Updated monthly: Refine assumptions based on what actually happened
What to Include in Your Forecast
Keep it simple. You need three main sections:
Section
What to Include
Difficulty
1. Revenue
Existing retainers (easy)
Expected project work (pipeline)
New business assumptions (conservative)
Start here
2. Costs
Payroll (incl. taxes & benefits)
Contractors & freelancers
Software, office, overheads
Mostly fixed
3. Cash Flow
When payments actually arrive
When expenses are due
Tax payments & one-offs
Critical
How to Build Your First Forecast
Start simple. Here's a step-by-step approach:
Step 1: Start with what you know
List all confirmed retainers and projects
Step 2: Add likely revenue
Include pipeline projects with probability weighting (70-80%, not 100%)
Step 3: Map out fixed costs
Payroll, rent, software. Things that don't change
Step 4: Estimate variable costs
Contractors, marketing, travel
Step 5: Build in cash timing
When will clients actually pay? When are expenses due?
Step 6: Review monthly
Compare forecast vs. actual and adjust. This is where the magic happens.
Common Forecasting Mistakes
Avoid These Pitfalls
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Being too optimistic
Assume 70-80% of your pipeline will close, not 100%
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Forgetting about timing
Revenue and cash are not the same thing
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Not updating regularly
A forecast is only useful if it's current
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Making it too complex
Start simple and add detail as you go
Using Your Forecast to Make Decisions
Plan Hiring
Can you afford a new team member in Q2? Your forecast tells you.
Manage Cash
Will you have enough cash to cover a slow month? See it coming.
Set Targets
What revenue do you need to hit your profit goals? Work backwards.
Scenario Planning
What if you lose a big client or win a major project? Model it.
Your Forecasting Action Checklist
The Bottom Line
Forecasting doesn't have to be complicated. Start with a simple 12-month model, update it monthly, and use it to guide your decisions. The confidence and clarity it provides are worth the effort.
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