It is critical to know what is coming around the corner. Accurate and effective forecasting is absolutely critical to small businesses, especially in the economic downturn, and should be done as a standard practice. It helps you keep a tight control over your business. It is fundamental to all businesses, whatever the size. As a small business owner, you should use all the tools at your disposal to make accurate forecast.
When forecasting, you neeed to forecast both for best and worst scenarios. Being realistic about what your aspirations are is fundamental to getting the support of external investors when you need their help. So what can forecasting do for your business?
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Forecasting helps you anticipate your short and long term future developments, for example when you will need some financing, how much you will make, etc. It should be a dynamic part of your business strategy, which is reviewed regularly and updated with actual results instead of a one off exercise. That way you can tell how things panned out compared to your forecast, and allows you to adjust your plans and activities accordingly.
It will enable you to keep a tight control over your business, understand what is happening in your business, see what strategies are working and those that are not working, and help you clarify your goals and use them to inform your budgets.
When forecasting you should have a short term and long term forecast, short term looking at the next 12, 6, or even 1 month, and focussing on your sales and operational strategies, your profit & loss accounts, your balance sheet, cashflow, and your financing requirements as each one of these can have a huge inpact on your business ability to continue trading.
Your long term forecast should be the next 3 to 5 years, and this is especially useful when you want to apply for finance, when you intend to make major changes to your business or launch a new product.
As well as all the areas you need to look at in your short and long term forecast you should also forecast what is likely to happen to the markets in which you trade in the future, what type of products people will be looking for, and how buying habits will change.
During June and July we will be holding a series of 1 Day Training Courses for Small Businesses at the Dugdale Centre in Enfield. Book your place now and learn how you can transform your business. Places are limited.
Risk Management – 15th June. £197
Crisis Management – 22nd June. £197
Business Forecasting – 29th June. £197
Cashflow Management – 6th July. £197
Key Business Performance Indicators – 13th July. £197