Episode 2053 - How Excitement Kills Accurate Financial Planning
Day 2053 of consecutive daily running in barefoot-style footwear. 20,530km covered on my way to 40,075km a lap of the world to raise £1M for children's causes including Great Ormond Street Hospital and BBC Children in Need.
In today's episode I am talking about something I did wrong last quarter, something I should know better than to do after over 20 years in business. I over-forecasted. I let excitement and ambition shape the numbers rather than grounding them in honest, scrutinised data. And it had a real impact on this quarter's plans.
This is not a failure unique to beginners. It is a deeply human tendency, and it is especially common among entrepreneurs and big-picture thinkers. The vision and the ambition are assets. But when they transfer unchecked into a financial spreadsheet, they become a problem.
I now run two forecasts — an optimistic one and a realistic one. Neither is a worst case. Both are stretch targets. The difference between them is where the danger sits if you only ever plan from optimism.
If you have financial responsibilities in your business, your team, or your own planning process, I hope this episode is worth reflecting on.
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