Your First eCommerce Financial Forecasting Plan in 10 Minutes

If you want to scale your e-commerce brand, you need to see what’s coming.

No, you don’t need to be psychic or anything fancy like that.

You just need to get serious about financial forecasting in your growth plans.

And don’t worry – by the end of this post, we’ll actually build a simple forecast together to show you it’s not as scary as it sounds.

The Harsh Reality of Winging It

Look, you can do what tons of other brands do and just wing it, flying blind into the storm.

But let’s be real – that’s a recipe for disaster.

Here’s what happens when you have zero visibility:

• No clue what your revenue will look like months from now
• Complete uncertainty about your profits
• Zero idea how much cash you’ll have on hand

Real Talk: What Can Go Wrong

The Hiring Nightmare

Want to bring on that rockstar COO to help run things?

Good luck with that if you can’t predict your cash flow.

Trust me, it’s a terrible feeling to hire someone at $10K+ per month and then realize a few months later that you can’t make payroll.

Inventory Hell

Without forecasting, you’re basically gambling with your inventory. You’ll either:

• Run out of stock and watch sales tank
• Get buried in excess inventory that eats up all your cash

Big Moves Gone Wrong

Think about it – how can you possibly plan for:

• Launching new products (that cost a ton in R&D before making a dime)
• Breaking into wholesale (where you need massive first orders)
• Raising money (because investors aren’t exactly thrilled by “I think we’ll do well”)

Hard truth: I haven’t seen a single brand hit nine figures by just hoping for the best.

Don’t Freak Out

Look, I get it.

If you’re not a finance person, this stuff can seem overwhelming.

But here’s the thing – while forecasts can get crazy complicated, the basics are pretty damn simple.

Because while the finance bros might make this seem like rocket science, getting started is way simpler than you think.

In fact, I’m going to prove it to you.

By the end of this post, we’ll build a basic forecast together in just a few minutes.

Nothing fancy – just the bare bones you need to get started.

First, I’ll walk you through the essential steps to get your data ready.

Then we’ll dive into an actual example where we’ll create a simple but useful forecast for a growing e-commerce brand.

No PhD in finance required – promise.

Step 1: Get Your Books in Order

First things first – you need to get your books straight. Like, actually straight. No half-assing it. That means:

• Every transaction logged
• All your expenses categorized
• Everything up to date in your accounting software

Sure, you could try forecasting without historical data.

But why make life harder? If you’ve got past data, use it.

It’ll make your forecast way more realistic.

Step 2: Dig Into Your Numbers (The Fun Part)

Once your books aren’t a mess anymore, it’s time to play detective with your data.

This isn’t just about spotting obvious stuff – it’s about finding the weird patterns that actually matter.

What you should be looking for:

Ad Spend Relationships

• Yeah, we all know more ad spend = more revenue (hopefully)
• But what’s your ROAS breaking point?
• How much new customer revenue do you get per ad dollar?

Customer Behavior Patterns

• How do new customers affect returning customer revenue?
• Is there a lag? (Like, do today’s new customers become next quarter’s returning revenue?)

Marketing Costs Reality Check

• How do agency fees stack up against ad spend increases?
• What’s the real cost of those influencer campaigns?
• How much are you bleeding on content creation?

Cash Flow Gotchas

• When do those annual bonuses hit?
• How badly do they wreck your cash flow?

Understanding where you’ve been helps you predict where you’re going. And trust me, these patterns are gold for forecasting.

Making Your Forecast Actually Work (The Nitty-Gritty Part)

We’re about to dive into the actual forecasting process.

It’s just two steps, but they’re big ones.

The Math Part: Making Your Data Work For You

First up, you need to make your historical data tell you about the future.

Don’t just pull numbers out of thin air – use what’s already happened to predict what’s coming.

Building Those Connections

Look, it’s simple math (but important):

• If revenue jumps 50%, shipping costs probably will too
• But ad spend? That might jump 70% because your ROAS is taking a hit

Tip: Build it so you can mess around with different scenarios. What happens if your ROAS drops from 2.4 to 2.2? You want to know before it actually happens.

The Reality Check: Your Growth Plans

Here’s where you factor in all the crazy stuff you’re planning that isn’t in your historical data:

• Launching that hot new product line?
• Finally breaking into wholesale?
• Dumping a ton of cash into marketing?

Don’t Forget the Hidden Costs

If you’re thinking “wholesale’s gonna add $500K monthly revenue” – cool. But have you thought about:

• Needing a sales director?
• Extra inventory costs?
• New shipping arrangements?

Bake all that stuff in. Seriously.

The Part Most People Skip (But Shouldn’t)

Look, any startup bro can say they’re going from $1M to $50M in a year.

The real work? That comes after you make the forecast.

Monthly Must-Dos:

1. The Reality vs. Fantasy Check

• Take your actual numbers
• Compare them to what you predicted
• Figure out why you were wrong (because you probably were)

Example Deep Dive:

You predicted $400K but only hit $300K? Ask yourself:

• Did your ads tank?
• Did you miss out on ad spend?
• Where are your repeat customers at?

2. Don’t just sit on it

• Take what you learned
• Adjust your future predictions
• If you thought you’d get 2.4 ROAS but you’re stuck at 2.1, update your numbers
• ‍

Truth bomb: If you do this every month, your forecasts will get scary accurate. But you gotta actually do it.

Remember: This isn’t a “set it and forget it” thing.

It’s a living document that gets better the more you work with it.

The gap between what you predict and what actually happens should get smaller over time – that’s how you know you’re doing it right.

Let’s Build a Dead Simple Forecast Together (Yes, Right Now)

Alright, enough theory.

Let’s actually build this thing and see how it works in real life.

We’re keeping it super basic, but you’ll get the idea.

Setting Up Your Baseline (The Easy Part)

First up, we’re throwing down some basic numbers:

• Starting revenue: $100K
• Monthly growth: 8%
• Discounts: 10% across the board

Pro Tip: Don’t get hung up on making it perfect. We’re just getting the bones down.

Adding The Money-Eaters

Let’s throw in the costs:

• COGS: 30% of revenue
• Shipping: 6% of revenue
• Ad spend: Based on ROAS

The ROAS Reality Check

Started with ROAS at 2.0 with a 2% monthly decline and… whoops.

Oh sh*t moment: Our contribution margin goes negative when ROAS hits 1.85. That’s a problem.

The Fix

Had to tweak those numbers:

• Bumped starting ROAS to 2.2
• Dropped the monthly decline to 1%
• Added fixed costs:
  • Rent: $7K monthly
  • Personnel: $20K monthly

The Truth Bomb

Looking at the final numbers – we’re not exactly printing money here.

This tells us:

• We might need outside cash (debt or investment)
• Maybe scale slower than planned
• Get that ROAS up
• Hell, maybe ditch the office and go remote

Keep It Real

Listen, this was a super basic example we threw together in minutes. Real forecasts can be beasts with:

• 20+ tabs
• Multiple scenarios
• Way more complexity

If you need that level of detail, yeah, you might want to talk to people who do this stuff for a living.

But this gives you enough to get started.

The Final Word

Remember what I said earlier – this isn’t a “one and done” deal. Your forecast should be a living, breathing thing that you’re constantly updating.

The point isn’t to predict the future perfectly – it’s to help you:

• Make smarter decisions
• Know where your money’s going
• Plan growth that won’t kill your business

Now get out there and start forecasting. And hey, if this helped, catch you in the next video.