The weather changes and that’s a fact, but it has a lot of influencing factors which is why meteorologists forecast the weather. They might not always get it right but they make predictions based on trends and their own gathered intelligence. The business landscape is very similar in this regard and your accountant can help you to determine what might happen in the future for your business, to help you make those important strategic decisions by forecasting the future. Whilst there are many similarities, there is one fundamental difference. Unlike the weather, you can change your business, you are one of the biggest influencing factors in your businesses forecast, but how can you change what you don’t know about or cannot see? Forecast and start making some changes for a better future today.
4 Reasons why you might want to forecast?
See into the future – it helps to predict the future, who doesn’t want to know what’s coming and when
Be prepared to overcome challenges – It should highlight in advance any challenges or problems that may arise and this will give you the time to formulate an optimum plan to respond rather than ‘fire-fighting’
It helps make decisions – It helps you make those all important business decisions. For example your forecast should tell you if you can afford to buy that new piece of machinery or hire that next member of staff
But what if X, Y Z happens – What-if scenario analysis will indicate the impact on your business that making changes could have both on the short and long-term
Forecasting can be as detailed or ‘high-level’ as per your requirements but there are lots of elements to factor in and you need to re-visit and re-forecast regularly, but remember that this is your business, your time, money, blood, sweat and tears that you have invested; so get the foundations right by starting forecasting today and the results will speak for themselves and you will doubtless wonder why you haven’t been doing this all along!