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Of all the many things I got wrong when I started my company, my original revenue forecast was right at the top of my mistakes. Not only was my forecast off, it was off by a lot.
Instead of the $1 million first year revenue I had forecasted, we did about $100,000. My board of directors was not surprised by my forecast miss, but they weren’t happy about it either.
Most startups miss their initial forecast, and I was no different.
Barry, the chairman of the board of my company, had a funny phrase he liked to say about startups and their forecasts. It goes like this, “Most startups miss their forecast, and you’ll find we’re no different.”
Barry’s statement is funny when it’s not your problem. However, it was my problem in my case, and I needed to fix it.
My board, correctly, asked me to explain what was going on.
You need to own your forecast mistakes, regardless of the cause.
We entrepreneurs are an optimistic bunch, aren’t we. That explains part of the reason I was off on my forecast, but it doesn’t explain the whole reason I was off.
