- Posted April 6, 2014 by
los angeles, California
Mona Cayard : How to forecast your business?
Mona Cayard : There are 4 main methods recommended to create or paint good forecast : method repositories, purchase intentions , objectives and market share and operational .
Method Repositories: What is your plan or strategy? There is plenty of information available on the internet related to business in general along with customer and competitor information for your specific business. Examples of business plans, profit and loss statements, balance sheets, cash flow statements and statistics that can be used to build your plan are readily available, but how the information is used and structured will determine the effectiveness of the forecast. Before beginning a forecast, first one must understand the risks, competition, opportunities, problems or issues and other requirements that may impact the business. This will help determine strategy, direction, and the next steps needed to build and grow the business.
Method of Purchase Intentions: It is understanding customer or buyer behavior. That can be accomplished by interviewing potential customers about their intentions and following and tracking their purchasing habits. This should be the basis of the sales process, knowing what the customers want. Instead of just relying on past histories, understanding customer behavior should be used to project future purchasing trends.
Method Objectives and Market Share: Knowing the market is very important. Understanding the market and customer trends helps determine the future sales process and revenue growth. One must analyze the market according to industry trends, local environment, behavior of existing customers, the intentions of potential customers and competitors. Projecting and catering to customer behavior is very important in increasing market share and moving customers away from your competitors. This is not a static process, it needs to continuously managed with the changing environment of customer and economic behavior.
Operational Method: How is the business being structured? What are the fundamentals required for the business? Fundamental requirements for each business are different and must be taken into consideration, along with some of the basics such as location, customer base, employees, vendors, inventory, payments/receipts, technology, customer support and day to day processes are very important in making sure the operations of the business are set up to support the needs for a successful operation. Know the basic operational requirements and use this information as the foundation to build your forecast.
It is advisable to use all of these methods and cross results to arrive at a realistic forecast. Forecasts are a useful tool to help lead the business, support operational and sales strategy, and to help determine the best use of resources. A good forecast will have a positive impact on the bottom line and be a guide to the future of the business.