Proformas (Stupid Tax)

I’ve yet to do a deal or scale a company where the proforma was correct. They are always off, and completely inaccurate. Things cost more OR if you’re lucky, less than you expect. The ramp-up usually takes 2x what you thought. 

So if proformas are always wrong, what’s the point? The point is despite their inaccuracy they are helpful. They force the creator to think. Think about the upside and downside. 

The proforma becomes a receptacle to expenses and income streams as they occur to you. A place to contain surprises. It might not be “right” but “right” isn’t the goal. 

The goal is to mitigate irreversible consequences.  

As time rolls on your proformas get smarter because...you’re smarter.