The do’s and don’ts of business forecasting

What does the future hold for your business? If you don't have a crystal ball, you can turn to business forecasting. This process involves using historical data, statistical analysis and predictive models to inform your business decisions.

From improved decision-making to having a competitive edge over the competition, there are many benefits to business forecasting. But to achieve these benefits, you want to make sure you're taking the right approach. Read on to learn a few do's and don'ts of business forecasting.

Do: Consider data from more than one source

The more information you have to work with, the better your forecasting will be. So make sure you have your historical sales data, as well as information from beyond your business, including market research and trends within your space.

Don't: Live in the past

More specifically, don't let past business trends completely impact your forecasting. The business landscape is constantly changing, as are the new technologies that shape it. What was true five years ago won't be true a year from now — especially now that the use of artificial intelligence is so widespread.

Do: Update forecasts over time

Forecasts are not set in stone. They need to evolve as new information becomes available. Regular updates to your forecasts can prevent surprises and keep your strategies aligned with the current business climate.

Don't: Go it alone

Don't let forecasting become a solitary activity. Involve stakeholders and encourage collaborative input enriches the process, bringing diverse perspectives and expertise to the table. The result? More enhanced forecasting. And throughout the process, stay as transparent as possible. Transparency is key to building trust and ensuring that everyone is aligned in their understanding of the business's future outlook.

Do: Leave emotion out of it

Yes, it's hard not to be passionate about your business, but it's important to avoid bias when developing your business forecast. Whether you're feeling overly confident or a bit worried, set those feelings aside and let the data lead you. Remember, overconfidence in forecasting can lead to rigid expectations.

Do: Turn to WMC Accounting for help

That's right, business forecasting is among the services our experienced team is ready to offer. If you're ready to develop a plan that can foster success over an extended timeline, reach out to WMC Accounting today.