Think back to when your company began. Without any history to reference, you planned only for the short term, watched every penny, and treated every customer like royalty. You probably worked in the field during the week, did the books in the evening, and met with clients on the weekend. As a startup, you were highly nimble. And as owner, you were completely involved.

Regardless of how things might have changed over years, the state of the economy has driven even the most mature companies back into startup mode. One big problem they face is learning how to forecast when historical information is no longer valid.

Let’s start with leads and sales. Without these, all other conversations become irrelevant. (If you haven’t reduced your personal and company overhead as much as possible, do that first.) The table LOCATE shows the forecast for the first quarter. The assumptions are conservative; they use average job size and average gross margin from the last six months, which for many are significantly down from what they were two years ago. Track your progress toward these goals both weekly and monthly so you can immediately spot trends. Re-forecast at the end of every month for the next month. Finally, update the following quarter to reflect the way things actually play out in the previous quarter. This kind of short-term forecast will help you cover your short-term financial needs and will force you to keep your eye on the ball at all times.

The key to this exercise is consistency. If you review the three critical assumptions — gross profit margin, average job size, and conversion rate — at least every other week, you’ll be able to react quickly enough to protect yourself. If leads or average job size decrease, you’ll have time to increase marketing before the spring building season begins. On the other hand, if leads or average job size increase (as many people in the country believe they might over the next few months), you’ll have time to think about hiring again.

So re-engage with your company as it was years ago. Become nimble, and look for short-term successes to build upon as we all find our way to the new normal.

Click here to download the monthly detail spreadsheet.

—Judith Miller is a Seattle–based remodeling business consultant and trainer specializing in accounting, finance, and computerization. Visit her blogs at and at