How much money will you need over the next 5 years to build your company?

How much revenue will you generate over the next 5 years?

Both are important questions.  And the only way to get meaningful estimates of both cash requirements and revenue potential is to develop a bottoms-up financial forecast. What we mean by "financial forecast" is projections of three key financial statements: the Income statement, the Balance Sheet, and the Changes in Cash Flow statement.

Projections do more than tell you how much cash you need.  You'll need a forecast to raise money - either from investors or from a banker.  The investor wants to see how much you'll grow (and whether your financial projections make sense).  The banker will want to be convinced that you can pay back the loan.  In either case - how do you create a forecast for a business that may not even have any revenue yet?