In entrepreneurial ventures, it's almost always the entrepreneur/founder who creates revenue and expense projections for the pro forma. Talk about a conflict of interests. It's especially dangerous when you as founder develop the expenses first. It's only natural to look for revenues that rise to these expenses after that. Classic inductive versus deductive reasoning.
The short post: develop revenue projections first. make them solid numbers that draw on similar operations. Go full Sherlock Holmes on finding comparables, using their publicly posted revenues and estimating revenues for private corporations. Contrary to general belief, most private companies do publish their revenues in interviews and public promotional material. You just have spend time finding this scattered and incomplete data. Gathering what you can and interpolating the rest is difficult but possible and will generate a basis for reliable revenue estimates. Use multiple sources.
When you're confident you have a reasonably good estimate for revenue over the next three years, only then should you tackle expenses. If these estimates are less than revenues, lucky you. If not, you have to take a harder look at expense and consider bootstrapping measures to bring them into alignment with revenue projections.
Finally, before revising revenue and making UNreasonable adjustments, have a trusted colleague take a look. And then have them consider any adjustments you make. If unreasonable, the project may be a no-go.
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