A projected statement of financial position should be based on real information rather than wishful thinking. The more accurate the information you incorporate, the better your chances of creating useful and meaningful projections.

Use past information as the basis for assumptions about the future/

Your books from previous accounting periods can provide numbers telling what percentage of revenue you typically spend on direct costs such as materials and payroll. They can also help you project fixed costs, especially if your business infrastructure is reasonably stable and costs like rent and utilities aren't going to change significantly during the projection period.

Do research to back up assumptions for new projects.

If your business is new or if you're launching a new product, you can still gather information to ground your projections in reality. Your local library will have information about demographics in your area, and this will help you to develop an idea of how many potential customers you may be able to reach. City and county offices can provide data about similar businesses that may affect or compare with your company's performance outcomes.

Create projections for a range of outcomes.

Of course you're hoping for and expecting unbridled success, but your project may take a while to get off the ground, and it may not even gain traction at all. Do a series of different projections showing best-case, worst-case and medium-case scenarios. These different versions of your projected financial statements will help you prepare for a variety of possibilities by showing how much you have to earn to break even and under what circumstances you may need extra capital.