Projections

1. Verbal or written prospective statements that a company makes regarding its financial performance. In simpler terms, projections are informed estimates of how a business will financially perform in the future.

Well-organized businesses have numerous projections that they are making and checking progress against. The first might be a one-year projection in one-month increments. It can be updated each month to integrate the latest performance data. There is also a one-year budget, which is a type of projection.

Many companies also make projections of three to five years for purposes of long-term growth planning. This is especially important for relatively new businesses that need to attract investors.

It should be noted that projections are not simply guesses of future profitability, nor are they wish lists for company performance. Instead, projections are both goals and the framework for achieving those goals. By making projections, a company sets its sights on what it wants to achieve (tempered by what it can realistically achieve). Setting the expectations automatically starts the planning process for meeting those expectations. And as time goes by, a company can regularly compare its performance against projections to monitor progress and correct course, if needed.

2. Interpersonal relationships: The degree to which one believes she or he can fix the perceived flaws of a significant other. Or, in the early stages of romance, the wildly positive qualities one sees in his or significant other that have no basis in reality.

 

EXAMPLE:

The owner of a recent start-up wants to open up two other satellite operations in other parts of the country. He doesn’t believe it is possible within the first year or two, but his projections show that he can reasonably expect to meet this goal in four to five years.