There is so much financial data released each month and with most of it giving a broad picture of the economy, forecasting can be increasingly difficult. What have you done to forecast the future of your company and industry?
Historical data alone should never be regarded as an indicator of future performance. And it is even harder to make business forecasts if the historical data isn’t even accurate. What other types of sources have you used?
Businesses do not have the luxury of waiting to see what happens. Entrepreneurs, small business owners, banks, investors and shareholders all want to see defined business plans and long-term financial forecasts. No matter what size your business, this lack of clarity means that it can be difficult to plot a path for the future when markets appear so erratic.
Faced with an unpredictable economic landscape, the solution is to make your business forecasts more fluid, ensuring you have that contingency plan in place, ready for if company performance falls below or exceeds forecasts.
5 Forecasting Tips:
1. Look beyond your own market
As more businesses are connected than ever and company linkages can mean that the performance of a client’s parent company abroad may severely impact the financial viability of its operations. Just because your own market is buoyant doesn’t mean there is not trouble ahead – financial problems can quickly ripple through markets affecting different industries at different points in the cycle.
2. Keep your plans fluid
As markets move extremely quickly your plans need to evolve. A five year plan is merely a broad guide, it needs to be flexible enough to adapt within five months.
3. Use business information data
Use business information, like credit reports to inform and guide your thinking, not rule it.
4. Use a range of resources
Combine business intelligence services with media insight to build a picture of market developments.
5. Set up alerts
Let the news come to you in real time, be it from Google, a business information provider (like Creditsafe) or a wealth of other sources. This will save you time by having the latest data delivered to you in real-time so you can rapidly adapt your processes.
If you would like a free trial of Creditsafe’s business credit reports to see how our reports can help you forecast more effectively please fill in the form at the top of the page.
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