7 Tips to Improve your Business Forecasting
Successfully navigating the turbulent waters of unpredictable market conditions and fluctuating customer demand is crucial to keeping your business afloat. The key to survival is to plan ahead and to attempt to forecast -as accurately as possible- where your business will be in the weeks and months ahead. Whilst analysing past performance and current trends can help business leaders to make informed predictions, business forecasting is a challenging discipline.
Business skills training experts Maguire Training cover this essential topic in their comprehensive and informative Accurate Forecasting course which provides delegates with the knowledge and strategies they need to produce accurate business forecasts. At a more simplistic level, any business can improve its forecasting acumen by following Maguire Training's 7 tips to improve your business forecasting.
- Start by sanity-checking your business plan
It won't be possible to make accurate forecasts about your company's future if your business plan is unrealistic or insufficiently detailed in terms of business goals, cash flow and market position. Ensuring that your business plan is watertight provides an accurate foundation upon which to base your forecasts. - Forecast and review at regular intervals
The factors which affect business change constantly, and the key to successful and accurate forecasting is to regularly monitor developments which may impact your business and adjust your forecast accordingly.
- Research your target market
In order to forecast accuracy it is vital to stay abreast of developments in your wider industry sector and to maintain dialogue with your customers in order to see how the market is evolving and how your business needs to adapt to potential future market requirements.
- Base forecasts upon data that is accurate and relevant
In order to produce accurate business forecasts the data you use needs to leave as little room for guesswork as is possible. Taking the trouble to ensure the integrity and validity of data prior to basing a forecast on it could avert a catastrophe further down the line.
- Have a contingency plan to cope with the unexpected
How will your business be impacted if your main supplier becomes bankrupt without warning? Or your production facility burns down? Or one of your most profitable key accounts transfers their business elsewhere unannounced? In order for your business to survive such unforeseeable eventualities it is vital to have a robust contingency plan in place.
- Favour pragmatism over optimism when forecasting
It can be tempting to assume that because things are going well for your business now there's no reason why this should change over three, six or twelve months. Unfortunately, nobody can truly predict future events and whilst there's no need to be overly pessimistic when forecasting it is better to be realistic and err on the side of caution than to presume that everything in the garden will stay rosy. - Have your business forecast impartially assessed
It can be extremely useful to have your assumptions questioned, your reasoning verified and your forecast scrutinised by a fresh pair of eyes. Obtaining an impartial second opinion can highlight aspects of your forecast that may have been overlooked as well as providing reassurance that you?ve covered every base to provide the most accurate forecast possible.
Accurate forecasting can minimise your business's exposure to risk in the longer term and is a skill that it is highly advisable for business leaders and managers to acquire. Maguire Training offers the indispensable Accurate Forecasting not only as a classroom-based course but also as online training, allowing delegates to access the content at their convenience via Maguire's innovative E-learning platform.
