Re:Financial Modeling for Startups: An Introduction
by daveungerer on Wednesday August 29, 2018 @07:49AM
(#17867469)
If you're forecasting at such a granular level 3 years in advance, your variances will be all over the place, which is not terribly useful to analyse. It won't be as per your example. It will be "I thought I'd hire one of person x, but instead ended up hiring 2 of person y, and delayed hiring z to compensate". The aggregate variance is what matters when you're doing a long term forecast.
A granular 12 month forecast is very useful for the reason you described, but we're discussing longer time horisons here.
It is still very useful for variance analysis. Like, I made 100k, expected 120k...because x person cost more than expected and x person was hired early. It's nothing to get upset about, but it aids your understanding.