Comments on: Discount your projections. Make surprises positive. https://berkonomics.com/?p=1480&utm_source=rss&utm_medium=rss&utm_campaign=discount-your-projections-make-surprises-positive Dave Berkus' business insights Wed, 07 Nov 2012 21:16:54 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Judy Connolly https://berkonomics.com/?p=1480&cpage=1#comment-6242 Wed, 07 Nov 2012 21:16:54 +0000 https://berkonomics.com/?p=1480#comment-6242 Our company is all projections Dave. We underestimated the projections using a 15% growth rate for projections. 15% is a low growth rate for our start-up. We used a formula based on Warren Buffets system, if a company has a 10% growth rate minus the treasury rate he’ll tend to buy or invest in it. For our purposes we bumped it up to 15% due to our projected potential growth of 200%+.

So I believe you are correct to under estimate it, and in the end beat the estimated projections.

]]> By: Ken Neeld https://berkonomics.com/?p=1480&cpage=1#comment-6230 Wed, 07 Nov 2012 00:12:28 +0000 https://berkonomics.com/?p=1480#comment-6230 I agree that discounting forecasts as a matter of course is not prudent. I went down that path in the past with little success. I have had far better results by setting the expectation that forecasts are what we expect to achieve and make plans around that. Discounting sales forecasts requires two sets of numbers, one from the sales team and one for operations for planning purposes. I prefer one set of numbers that everyone buys into and is held accountable for.

]]> By: John Morris https://berkonomics.com/?p=1480&cpage=1#comment-6225 Tue, 06 Nov 2012 20:21:47 +0000 https://berkonomics.com/?p=1480#comment-6225 Always good to beat the guidance. However, discounting can become a slippery slope. Discounting may undermine accountability and team confidence. Holding team accountable for the KPIs supporting a forecast is a best practice. You can always manage budgets on lower expected revenues.

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