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Estimating a projected rate of growth is part of a businesslike approach that can be helpful if you're trying to prove you have a real business instead of a hobby. To start a business, you have to know how much you can expect to make and how much you can expect to spend. Easier said then done. This page helps you get started.

Something like .05 (1/2 percent) per month is a steep growth rate for any new business.

Ask yourself how much more you need to make each month to make your business work. This estimate helps you know how much to put aside for taxes, how much you'll probably need for expenses and how to set reasonable goals for yourself.

Projection Formula (how much you can expect to earn)

Take your average monthly income, multiply it by the estimated growth rate.  For example: .05 (half a percent growth per month). This is actually sort of a high estimate. The formula is straight forward:

sum((month #1*.05)+(month #1))

Example:

Lets say that in January, I think my business will make $100.00 but in February, I'd like to be making $100.00 + .05% or $105. I think this rate of growth is consistent throughout the year. Here is how my estimated year will look:

The formula in Excel for cell B3 is: =SUM(B2*1.05).

How much you can expect to spend each month

Once you've made your projection, use the same formula to figure your your expenses if you think they will grow at the same constant rate. You need to figure out how much it costs you to open your doors each morning.

For your capital purchases, use the depreciation instead of the actual cost of the item. (for example, a $2000 laptop = $740 depreciation the 1st year.

Divide that by 365 and it comes out $2.03 per day or $60.90 per month). If you deducted the entire $2000 in one day it "skews" your calculations.

Amass your costs over a month. Count everything (including mileage needed to go get supplies etc.) then divide by 30.

That's what you have to earn every single day to "make expenses", or in other words, to break even. Deduct those expenses from a month's cash-in from operations. It's THAT resultant number you want to project growth on.

Evaluate your progress in X months (3/6/9/12) to see if you have been successful.

More suggestions for getting started

1. Create an evaluation sheet to refer to in order to determine if what you are trying to achieve is working.
2. If you are working with a partner, put an evaluation time frame on your relationship at which time you can decide whether what you are trying to achieve is working.
3. Put  your objectives on paper.
4. Describe key personnel and their duties and describe the way the business will be run (advertising and other ways of getting customers in the door).
5. Give justification for your businesses location, appearance and quality.