Meteorologists look at a lot of factors and data when making weather predictions. They do so because people who are in the path need to be properly prepared, but at the same time, they don’t want to cause mass hysteria. Their predictions must be accurate.
Your business should also be doing routine forecasts. Predicting the level of your business will help you become more efficient and profitable in the long run. Knowing how much business you should expect can help you to properly staff. Too many employees and you will be spending all of your profits on unnecessary payroll. Too few and your customer service will suffer.
Here are a few of the things you should consider when forecasting your business:
- History – Look at historical data on past sales and see if there is a pattern to your business being up or down.
- Holidays – Does your business thrive during some holidays and die during others? Is your business more seasonal
- Competition – Did you see more competition in the past year that may be taking market share? Did you make some adjustments or improvements that can take market share from your competition?
These factors should be evaluated to make an annual forecast. You should also fine tune your forecast quarterly, monthly and weekly. If you need help creating a forecast for your business, talk to your business coach. Together you create a sunny outcome.