As we approach the end of the third quarter, most business owners are understandably focused on finishing 2026 strong. But there’s another question worth asking: What do you want your business to look like in 2027?

How much revenue do you want to generate? What level of profit should the business produce? Are you planning to hire, invest in technology, expand capacity, increase your compensation or build cash reserves ?

If you haven’t started thinking about those questions, now is the time.

Your goals shouldn’t live only in a strategic plan. They need to make their way into your financial forecast.

Your Forecast Turns Goals into Numbers

A financial forecast is more than a budget. A budget may tell you what you expect to earn and spend. A good forecast helps you understand how the decisions you make throughout the year could affect revenue, profitability and cash flow.

The U.S. Small Business Administration recommends using financial projections as part of managing business finances and making informed business decisions. That matters because a goal such as “grow revenue by 20%” sounds good, but it isn’t a plan.

You need to think about questions like: Where will that additional revenue come from? Will you need more customers? Higher prices? Additional employees? More marketing? Greater capacity?

And perhaps more importantly: Will that additional revenue translate into more profit and cash?

Your forecast forces you to work through the economics behind the goal.

Planning Ahead Gives You More Options

One of the biggest advantages of forecasting is time. Suppose you want to hire two people next year. Instead of waiting until you’re overwhelmed and deciding whether you can afford them, you can model those hires now.

When would they start? What will salaries and benefits cost? How much additional revenue or capacity should they create? What happens to cash while you’re waiting for that return?

The same thinking applies to equipment purchases, new locations, debt repayment, marketing investments and owner distributions. You are making decisions before the pressure is on.

That doesn’t mean your forecast will be right. It probably won’t be.

The purpose isn’t to predict exactly what will happen in 2027. The purpose is to understand what could happen and prepare accordingly.

Build More Than One Version Of 2027

This is where scenario planning becomes valuable.

Rather than creating one forecast and assuming that’s how the year will unfold, consider creating three scenarios. Your base case represents what you reasonably expect to happen. Your upside case shows what happens if sales are stronger than anticipated. And your downside case considers what happens if revenue falls short, costs increase or you lose an important customer.

McKinsey has advocated for more agile financial planning approaches , including scenario planning and rolling forecasts, particularly when businesses are operating in uncertain environments.

For a business owner, the benefit is simple: you’ve already thought through some of your choices before you need to make them.

Your Financial Plan Should Support Your Business Strategy

There should be a direct connection between what you say you want from the business and what the numbers say is possible. If your strategy is to grow 25%, the forecast should show what that growth will require. If you want to increase profitability, identify where margins need to improve.

If you want to reduce your dependence on the business, your plan may need to include investment in management or additional employees. And if you’re building toward an eventual sale, your financial plan should help you create a stronger, more valuable company along the way.

Strategy without financial planning can quickly become wishful thinking.

Don’t Put Your Forecast in a Drawer

Once you’ve created your 2027 forecast, use it. Each month, compare your actual results with what you expected.

Ask questions like: Did revenue come in higher or lower? Are margins holding? Are expenses running ahead of plan? Is cash building at the rate you anticipated?

When circumstances change, update the forecast. Your financial plan isn’t something you create once and revisit next September. It should be a living management tool that helps you decide what happens next.

You can’t know exactly what 2027 will bring. But you can decide what you’re trying to build. Starting your financial planning now gives you time to test your assumptions, identify potential problems and make intentional decisions about where you want your business to go. January shouldn’t be when you start thinking about 2027. It should be when you start executing the plan.

Melissa Houston, CPA, CEPA , is a Fractional CFO and business value advisor who helps founder-led businesses improve financial performance, build enterprise value and prepare for a future exit. She is the host of The Sellable Firm Podcast and author of Cash Confident: An Entrepreneur's Guide to Creating a Profitable Business .

The opinions expressed in this article are those of the author and are intended for informational purposes only. They should not be considered accounting, tax, legal, or financial advice. Readers should consult qualified professionals regarding their specific circumstances.