The importance of business forecasting explained

Simangele Mzizi, Fsp Business, 05 Nov. 2014

Tags: business forecasting, forecasting, excel and forecasting

At this time of the year “forecasting” is the one word on most business owner’s lips.

But what does it mean and why is business forecasting so important?

Read on to find out so your business can effectively plan for 2015 when it comes to finances.

What exactly is forecasting?

According to, forecasting is the use of historic data to determine the direction of future trends.
You can use forecasting in your company to determine how to allocate your budgets for an upcoming period of time, in this case 2015.
You can base this on the demand for the goods and services you offer, compared to the cost of producing them.
Forecasting, according to, also provides an important benchmark for companies that have a long-term perspective of operations.
Now let’s look at the importance of business forecasting…

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Here’s why business forecasting is crucial

Business forecasting is more than a simple prediction. It involves analysing information about your business, the economy, the market place and current trends to prepare for your business’ future, says
If you do it right, it can make your business more profitable.
Essentially, forecasting is important when it comes to business planning, business success and business management.
In the business world, you can’t afford to just “wing” it, you have to plan and prepare for the future. And business forecasting is the one thing you can’t neglect.

So how do you do a forecast?

There are a number of different methods you can use to forecast, but we recommend you use Excel because it’s simple and effective.
If you’re not familiar with Excel or don’t know how to navigate through it, check out the Excel Training DVD 2014: Solutions to Your 35 Biggest Excel Finance Problems.
Now that you know all about the importance of business forecasting, don’t put it off, do it so you can effectively plan for 2015 when it comes to finances.

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