01. How to Forecast Profitability & Build a Budget That's Useful

Overview:

Learn how to build a practical budget model that actually helps drive management decision making. This introductory course will help you understand the fundamentals and value the budget model should provide the end-user, how to build it, and why you should be excited to produce them every year.

We will learn what it means to budget "from the bottom-up, but review from the top-down" and walk through some of the techniques and methodologies I use with real management teams in my career.

I will also show you a few models I built for actual clients in the $10m - $100m sales range. In my experience, Excel can be used very effectively to tell a story and highlight to management the strengths and weaknesses of the business.

We will dive into:

• Revenue forecasting
• COGS and expense budgeting approaches (% of revenue, vendor-level, and more!)
• Sales & Marketing budgets and relationships to sales forecasts
• Selling, General, & Administrative (SG&A) vendor-level budgeting
• Gross Margin, Contribution Margin, and EBITDA profitability relationships
• Graphs, KPIs, and outputs that management can use to track performance in weekly or monthly reporting.

Table of Contents (~4 hours):

0. DOWNLOADABLE EXCEL FILE: Budget Model Completed Template

1. Intro to Useful Budgets
2. Revenue Forecasting Basics
3. Revenue Forecasting - Bonus Video (Client Model: CPG)
4. COGS - Budgeting Basics
5. COGS - Headcount & Cost of Labor
6. COGS - Bonus Video (Client Model: CPG)
7. Product COGS
8. COGS - Bonus Video (Client Model: Restaurants)
9. COGS - Bonus Video (Client Model: Cannabis)
10. SG&A (Marketing)
11. SG&A (Other Expenses)
12. EBITDA & Profitability Graphs
13. Graphs - Bonus Video (Client Model: CPG)
14. Graphs - Bonus Video (Client Model: Restaurants)
15. Interest, Tax, Depreciation, & Net Income
16. Final Notes