Have you switched on the TV in the morning to the display
of a weather forecast which predicts heavy rain at certain times of the day? How did this affect your decision to go out? Did you prepare yourself with an
umbrella while going out or you went out without one? If my guess is right, you
prepared yourself for the rainfall by either going with an umbrella or a
raincoat. Now, that prediction of the future event, which in the above case is
a heavy shower is a forecast, a weather forecast.
But our emphasis here is on the business forecast.
What is a Business forecast?
Do you know that most inventions today were
once forecasts? There are many forecasting apps but our focus is on
the business forecast. Business forecasting simply means the process of making
predictions about a business’ future through analysis, data and insight. The
predictions made through forecasting doesn’t end at just predictions but
provides alternative courses of action. Today, many business owners, and
managers are tapping into the usefulness of forecasting, and as such are
seeking the services of experts in the field. You should read reviews of experts
on ReviewsBird.com to enable you make a well-informed decision.
The saying that to be forewarned is to be forearmed,
bears a hold here, as forecasts can be used to steer the activities of a
business towards achieving greater profitability. If the above is correct, then
how can companies and businesses leverage on forecasting to grow their
business? Put differently, what are the uses of business forecasting?
Business forecasting and it’s uses
Estimating Financial needs: Business forecasting plays a major role in estimating a
company’s financial needs. An incorrect estimate of capital needed for the
smooth running of a business could halt operations, while an incorrect estimate
of expenditure could leave a company in deficit. Also, if planning to expand a
business, diversify or improve on existing services, a business forecast is a
tool that can be used to cross all t’s and dot all i’s.
Establishing a New Business – The eventual success of any business venture depends
largely on a good business forecast. Just like a farmer planning to cultivate
on a new soil first needs to determine the nature of the soul, its fertility
and other requirements, so does establishing a new business require
fore-planning. Before establishing a new business, you have to map out the
demands for the product/service, your competitors and the sources of raising
finances, among other things. If the forecasts are made systematically, then
the operations of the business will go smoothly and the chances of failure will be minimized.
It is an impossibility to plan without forecasting. How do you begin to plan for what we do not know of? In formulating any
business or managerial plan, one has to look at what the likelihood of the
future may seem like. A peep into possibilities in the future helps the
businesses to strategize in making plans that will be beneficial, as well as a factor in alternative courses of actions for difficult situations.
As a business owner, it is recommended that you use forecasting to your advantage and for the growth of your business. This work does not boast of exhausting all the usefulness of forecasting but serves as a pointer to its importance which individuals and businesses can build on.