It doesn’t matter which industry your business falls into, business forecasting is essential in planning effectively. Check out the resources our team offers to aid in your company’s growth strategy.
In this blog post, we will discuss what a business forecast is, why it is essential for growth, and how to create and implement one for your company.
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What is business forecasting?
Business forecasting is the process of using data, analytics, insights and experience to make predictions, essentially driving better decision making for ultimate business growth.
So, in short, a business forecast may be defined as an educated assumption of future happenings affecting your business, market and overall industry.
Why do I need a business forecast for my growing company?
- Develop structured plans
- Create accurate budgets
- Evaluate market trends
An educated business forecast is essential in planning your company’s growth strategy. A forecast is also beneficial in making many business decisions for the coming weeks, months and years. When used correctly, a forecast can launch your business growth above and beyond that of your competitors. Stay ahead of the game by preparing in advance for the coming year.
Types of forecasting
There are two main types of forecasts when it comes to predicting the market; qualitative and quantitative.
Qualitative – qualitative forecasting relies on mostly observation and opinions from both industry experts and the consumer base. Reaching out to a finance professional and obtaining data from customers directly can be beneficial in this instance. This method is usually short-term and involves heavy market research. Ex. Customer surveys and polls
Quantitative – quantitative methods are long-term and utilize statistics and historical patterns. This method heavily relies on data and past trends to form an accurate prediction. This type of forecasting seeks to connect different variables to find cause and effect relationships that may be used in predicting shifts in the market.
How do I prepare a business forecast?
First, it’s important to consult with either your leadership team or a team of professionals who are knowledgeable in your industry. Next, define the question(s) or problem areas that need to be solved with your forecasting efforts.
- Set a baseline for comparison
- Determine long-term projections
- Review and measure forecasts
It’s important to remember that forecasts can change depending on factors such as industry growth, decline and other circumstances outside of your control.
Need more information or expertise concerning long-term financial planning for your business?
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Do you need help prioritizing your business’s growth? Check out the resources our team has to offer. With over 75 years of both accounting and human resource experience, we act as a business partner, assisting with many of your back-office and administrative needs.
Budget-Friendly Outsourcing Solutions
At LUXA, we are passionate to provide budget-friendly outsourcing solutions that can help businesses save money. We specialize in a variety of services, including accounting, bookkeeping, HR, and payroll.
We understand that every business is different, and we will work with you to create a customized solution that meets your specific needs. Contact us today to learn more about how we can help your business save money through outsourcing.
LUXA Enterprises specializes in HR services, outsource accounting, bookkeeping, and payroll services. We match up with ideal candidates for services by allowing small to midsize businesses to increase focus on their growth through outsourcing. If you want to know how we can help you, contact us today!
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