Forecasting, done right
Looking in the rear-view mirror is not the way to navigate forward. Cambridge Financial Direction Ltd’s Nick Tiley explores ways to find the business indicators that matter when this global pandemic demands an understanding of the whole picture
From drawing up a business plan to predicting sales and growth, you’d be forgiven for thinking a crystal ball was your most useful business tool. However, when it comes to forecasting there are more reliable indicators of what lies ahead – as long as you know how to read the signs and interpret wisely. The better you are at planning ahead, the better you’ll perform when there are significant changes in demand. Nowhere has this been better shown than during the global pandemic.
Once up and running, there’s a temptation for businesses to use internal information and not consider the outside world as much. There’s a danger that you’ll work from lazy assumptions such as ‘last year plus 5%’ or ‘what head office asked for’. While such targets may have some grounding in real data, setting truly informed objectives is essential.