Forecasting

How can a company be successful if it does not know where it is going? Would you drive to an unknown place without a map or directions? Forecasting is a process similar to creating a map of where your business is going. It is the starting point for many cost-cutting and profit-maximizing improvements, but unfortunately it is a process that very few small to medium-sized businesses undertake.

The response to why most companies do not forecast is almost always the same..."How do I know what my company will do next year? I don't have a crystal ball." Would you not use a map just because you don't know what traffic will be like? A forecast is not supposed to predict exactly what will happen and how it will happen. In fact, a forecast will never be exact. A forecast is an up-front look at where your company is likely headed and serves as one of the most critical tools in managing the financial well-being of your business.