How to Create an Effective Financial Forecast With No Historical Data

An established business regularly relies on years of sales records and historical data to estimate future income and expenditure. Their projections are typically based on real performance data.

What happens, though, if you’ve just started a new business or have yet to create a financial forecast? Without historical data, it can feel intimidating or overwhelming to get started on your first plan. The records simply don’t exist, making the forecasting process even more challenging.

Despite this, it is still essential to forecast. Investors will expect to see projections, and business owners need to understand potential risks and opportunities. Even without past data, you can build a practical forecast by using assumptions, research, and structured planning.

We’ve put together a clear process for creating a useful financial forecast without historical data.

Start with the predictable parts of your business

Even if you’ve just started a business, there are some financial elements that are relatively easy to estimate.

For example, your fixed costs can usually be planned in advance. These may include:

• Office rent
• Software subscriptions
• Salaries for initial staff
• Insurance or legal costs

As a business owner, you are often in control when these costs increase. For instance, it is you who decides when to hire new employees or move into a larger workspace

Without historical data, one of the more difficult parts to forecast is your sales revenue and variable costs – especially while you’re still testing your products or marketing strategies. These numbers are uncertain, which means that forecasting needs a more structured approach, rather than simply using guesswork.

Step 1: Identify the metrics that drive sales

To start forecasting your revenue without any historical data, begin by looking at the key performance indicators (KPIs) that influence your sales.

Every business has defined steps that guide customers from discovering their product to actually purchasing. For instance, an e-commerce business may track:

• Website traffic
• Conversion rates (percentage of visitors who buy)
• Average order value
• Marketing cost per visitor

Using these metrics, you can estimate revenue for your business with a simple formula:

Revenue = Website Visitors × Conversion Rate × Average Order Value

To take this one step further, you can dig deeper into your marketing data to increase accuracy. For example, you can look at:

• Organic search traffic
• Direct traffic
• Paid ads
• Social media referrals

Each of the above channels will likely have different conversion rates and acquisition costs. Structuring your forecast in a way that highlights the above helps link marketing activity directly to revenue.

This level of detail also strengthens your financial plan when presenting it to investors or partners.

Step 2: Use industry benchmarks and market research

If you have no historical data, industry benchmarks are going to provide the most valuable information you can get your hands on.

A ‘benchmark’ is an average, and in the context of a business industry, it means looking at performance metrics from competitors in your market and drawing an average of their data. This data could be conversions rates, or potential advertising costs.

You can find benchmark data through:

• Industry reports and market research firms
• Online business resources and case studies
• Advertising platforms such as Google Ads or Meta Ads
• Networking with industry professionals or advisors

It’s really helpful to understand what the average performances in your industry are, but it’s also good to know what the top performing benchmarks are. By knowing the upper limits in your industry, you can make sure your forecasts are realistic.

It’s important to note that some metrics (like pricing) will depend on your own product strategy. In these instances, make reasonable assumptions and update them once you have real data.

Step 3: Estimate your confidence levels

It is difficult to forecast at this stage with just analytical data – it does partly rely on strategic judgement.

Your confidence levels reflect just how close you expect your performance to be compared with those industry averages.

Let’s consider conversion rates for an online store:

• If you’re building your own website without expert experience, your conversion rates may initially fall below industry averages
• If an experienced development or marketing team is involved, however, you may expect performance closer to those benchmark levels

Customer feedback can also be really important in helping determine your confidence levels. Questions to consider include:

• How positive was the feedback on your product or service?
• How many people participated in testing or research?
• Did customers clearly understand the value of the product?
• Was pricing validated during testing?

These insights help determine whether your projections should start conservatively or closer to industry averages.

Step 4: Build multiple financial scenarios

A single-instance forecast is rarely reliable without any historical data. Instead, you should build multiple financial forecast scenarios to represent different possible outcomes.

The most common approach includes:

Base scenario

• This is a realistic projection based on average assumptions and reasonable performance.

Best-case scenario

• This is a scenario where your marketing, product adoption, and overall growth is better than expected.

Worst-case scenario

• This is a scenario where you experience some challenges – such as slower customer acquisition or lower conversion rates.

The overarching goal here isn’t to predict the future. What you’re trying to do is define a range of realistic outcomes.

These scenarios help you to answer some important questions as you grow, for example:

• How much funding does the business need?
• When could the business become profitable?
• How sensitive is growth to marketing performance?

Industry benchmarks help keep these scenarios realistic. For example, it’s unlikely a new business will immediately outperform the best companies in its sector.

Apply scenarios across the entire business

Make sure that your financial scenarios don’t just focus on sales projections. Once your revenue estimates change, the other parts of your business will need to adapt as well.

For instance:

• In a worst-case scenario, hiring may be delayed and expenses reduced
• In a base scenario, moderate growth is expected and gradual expansion might be planned
• In a best-case scenario, better sales could speed your hiring process

In essence, scenario modelling helps business owners to understand how operational decisions connect to financial outcomes.

They’ll help you make sound business decisions that aren’t just based on guesswork. 

Refining your forecast over time

A financial forecast built without historical data is only the starting point. As your business launches and begins generating real numbers, those actual results should replace assumptions.

Over time, actual data will help validate or challenge your original projections. The forecast will inevitably become more accurate as real performance data accumulates.

Until then, scenario planning and benchmark-based assumptions allow you to make informed decisions – even without past financial records.

Start your plan today

You can’t predict the future without historical data. What you can do is build informed estimates using research and logical assumptions.

Tools like Brixx can help make the process easier. Instead of relying on spreadsheets or rough guesses, you can map out your assumptions, test different scenarios, and clearly see how changes in your inputs affect your outcomes. This allows you to build a structured, flexible forecast – even when you’re starting with little to no data.

In the early stages, clarity matters more than precision. With the right tools, you can create a financial forecast that gives you direction. Get started today with a free 7-day trial.