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Why You Should Incorporate Financial Forecasting

October 26, 2017 by OSYB Staff

U.S. Small Business Administration’s guest blogger, Tim Berry, shares reasons why you should include forecasting in your small business management plan.  You need to forecast so that you can clearly see the connections between sales, costs and expenses.  When you closely monitor the fluctuations, you can make adjustments for example: if sales are down you adjust your expenses.

Suggestions for forecasting:

  • Do it yourself – no one knows the unique qualities of your business like you do
  • Know your drivers – for example if you sell goods in a retail store know which inventory is not moving
  • Break your forecast into factors you can track, and manage

“With forecasting, you see the connections between the different uses and sources of cash. You compare what you expected to what happened, and you make changes.”

Read more:  Why Bother with Financial Forecasts