In this video, learn two ways to establish income forecasting credibility: establishing a track record for accurate forecasts and creating a general reputation for honesty and fair dealing.
- The buyer of a business buys…that company's future, not its past.…So, what a potential business buyer wants to do…is to forecast that company's income…and as part of effort to sell a business,…the current business owner often generates…forecasts of future income to show…the potential business buyers…what a good deal their getting.…Obviously, the current business owner…has a huge incentive to make…very optimistic income forecasts…in order to push the purchase price as high as possible.…In a similar fashion, the current business owner…has a huge incentive to establish her or his…income forecasting credibility.…
I will describe two ways to establish…income forecasting credibility.…First, establishing a track record for accurate forecasts,…and second, creating a general reputation…for honesty and fair dealing.…Let's first talk about establishing…a track record for accurate forecasts.…A good business person is always constructing…income forecasts for internal planning purposes.…The forecast also provide a good basis…
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- Summarize the two forecasting techniques used to create a complete business plan.
- Analyze the five methods for maintaining financial records for a company and explain what kind of company would require each method.
- Calculate payroll expenses with accuracy.
- Apply the entity concept to hypothetical situations.
- Describe the process for obtaining financing from third-party sources.
- Explain the process for valuing a company.