Why are financial projections necessary?

Financial projections are estimates of future business activities. By estimating the future, you have a target to shoot at. You have a frame of reference, even if the projection is not highly accurate. The chief value of financial projections for a business owner is not so much the attempt to predict the future with accuracy, as it is a plan to set a target or goal to work toward. The projections provide you a framework to compare actual performance from which you can adjust tactics to maximize success. Seasoned professionals, like CPAs, have the experience to provide guidance in both the setup and monitoring against these projections.