Understanding your numbers - Targets, Forecasts & Projections
One of the aspects of my work as an executive in Mindvalley that I’ve come to value over the years is the art of setting targets, building forecasts, and running projections to hit those numbers.
These three concepts often get mixed up, so let’s do a quick refresher on what they mean.
🎯 Target - This is the goal you set for a specific time period. For example: “Hit $1.5M in revenue by year-end.” A good target is ambitious enough to inspire action, and it gives you a benchmark for performance, motivation, and accountability.
📈 Forecast - Once you have a target, you need to continually forecast the most likely outcome based on the current data and trends. This is your best prediction of where things are heading. The more data you have, the more accurate your forecast will be.
Example based on target set above:
Target: $1,5000,000 by year end
Revenue so far (first 6 months): $600,000
Average Monthly Revenue (first 6 months): $100,000
Forecast Revenue based on current trend: $100,000 X 12 months = $1,200,000
Forecast Revenue Gap to Target: $1,500,000 - $1,200,000 = $300,000
Average Monthly Revenue for next 6 months to hit target: ($600,000 + $300,000) ÷ 6 = $150,000
From this forecast, if current trend continues, you’ll end up $300k below target. You will need to boost current monthly revenue in the second half of the year to close the gap.
🔮 Projection - This is where you create “what-if” scenarios to close the gap between the forecast and the target. Projections are not predictions, they are simulations.
Example projections to close the gap:
1) Increasing prices by while maintaining current sales volume
Current Average Monthly Revenue: $100,000
Number of Customer per month: 10
Average Revenue per Customer: $100,000 ÷ 10 = $10,000
Increase price by 50% per Customer: $15,000
Projected Average Monthly Revenue: $15,000 X 10 = $150,000
2) Launching a lower-priced product to boost customer volume
Current Average Monthly Revenue: $100,000 (10 customers @ $10,000)
Lower-priced product: $5,000
Projected New Customer for Lower-priced product: 10
Projected Revenue for Lower-priced product: $5,000 X 10 = $50,000
Projected Average Monthly Revenue: $100,000 (existing) + $50,000 (lower-priced product) = $150,000
3) Opening a new channel or campaign to increase reach
Current Average Monthly Revenue: $100,000 (10 customers @ $10,000)
Projected New Customer from new campaign: 5
Projected Revenue from new campaign: $10,000 X 5 = $50,000
Projected Average Monthly Revenue: $100,000 (existing) + $50,000 (new campaign) = $150,000
Each projection explores a different path to the target. By testing multiple scenarios, you can choose the strategies with the highest likelihood of success.
A useful analogy: the target is your destination. While on the journey, your forecast is the estimate of how long it will take to get there based on current road conditions. Projections are the alternative routes you could take to arrive faster or more efficiently.
Now that we’ve clarified the difference between targets, forecasts, and projections, let’s walk through how to put them into action so you can hit and even exceed your goals.
Start looking at your numbers
It sounds obvious, but the first step is to truly know your numbers. Whether you’re trying to grow business revenue, lose weight, or save more money, you can’t start improving until you know exactly where you stand and where to find that information.
Get into the habit of reviewing these numbers regularly. At Mindvalley, I set up our reporting system so company revenue figures arrived in my inbox every morning. As the saying goes, you can’t improve what you don’t measure.
If you’re unsure which numbers matter most, start with the ones directly tied to your targets. These are your performance yardsticks, showing whether you’re getting closer to your goal or drifting off course.
Dig deeper into your numbers
Topline figures like total revenue or total sales are a good starting point, but they rarely tell the whole story. To understand what’s really happening, break your numbers down and see how different parts of the business connect.
In a subscription business, for example, total revenue comes from two streams: new subscription revenue and recurring revenue from existing customers. New subscription revenue might be influenced by your customer acquisition cost, while recurring revenue depends heavily on retention rates.
By segmenting, dissecting, and looking for patterns in your data, you’ll get a clearer picture of current trends. The more granular your view, the more accurate your forecasts will be and the more confident you’ll feel in making decisions.
Understand what drives your numbers
Once you’ve broken your numbers down, focus on the levers that have the biggest impact. These are the variables that, when changed, can significantly move your results for better or worse.
In a sales-driven business, this might be lead volume, conversion rate, and average order value. In a subscription business, it could be acquisition cost, churn rate, and customer lifetime value. Knowing these drivers means you can forecast with greater accuracy and design projections that directly address your gaps.
By identifying the metrics with the highest leverage, you can focus your energy on the initiatives and strategies most likely to achieve your goals instead of spreading effort across less impactful areas.
Run your numbers
The entire point of understanding your numbers is to help you achieve the targets you set. Clearer numbers give you better visibility on where you stand right now. A deeper understanding lets you forecast more accurately, and knowing the levers with the biggest impact helps you build stronger projections toward your target.
Run through the steps below to continuously move closer to your goal.
- Review your numbers to see where you stand
- Forecast the likely outcome based on current performance
- Project scenarios to improve that outcome
- Act on the most promising scenarios
- Repeat as new data comes in
This decision-making loop keeps your strategy grounded in reality while giving you the agility to adjust quickly, incorporating feedback from each action and refining your approach until you reach (or exceed) your target.
But as powerful as it is, numbers alone can't tell you everything, which is why the next step is to look beyond them.
Go beyond your numbers
Numbers are powerful, but they're not the whole picture. They may tell you what's happening, but not always why it's happening or what's about to change. They give you a window into your business but it shouldn’t be the only one you look through.
You can’t run a business by living inside a spreadsheet. Targets, forecasts, and projections all rely on numbers, but they also need the context that numbers alone can’t capture. Market shifts, team morale, competitive moves, and customer sentiment can all shape your outcomes in ways your data may not yet reflect.
Use your numbers as a solid foundation, then layer on real-world observation, conversations, experience, intuition and market awareness. This balance of data and unique context is what transforms raw figures into a strategy that actually works.
And while targets, forecasts, and projections are often tied to business performance, their value reaches far beyond the spreadsheet. You can apply the same thinking to personal goals, creative pursuits, or any situation where you want to turn intentions into results.
The process stays the same, set a clear target, forecast your likely outcome, and explore projections to bridge the gap but the magic happens when you pair these tools with real-world context, lived experience, and an understanding of the human factors at play.
That’s when numbers stop being just data points and start becoming the backbone of strategies that truly deliver. In the end, it’s not just about hitting the numbers, it’s about using them to create results that matter.
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