All companies can benefit from regular business forecast reports. But what exactly goes into a business forecasting strategy? And how can you adapt a report format to your organization’s needs?
First of all, let’s take a closer look at the definition of business forecasting.
According to Investopedia, it “involves making informed guesses about certain business metrics, regardless of whether they reflect the specifics of a business, such as sales growth, or predictions for the economy as a whole.”
Prepare to make a business forecast report
Before you begin reporting, make sure you have all the necessary information:
- Clear, accurate, and relevant data;
- Key Performance Indicators (KPIs) and additional metrics;
- Product or service categories to include.
Once you have all the details settled, outline the purpose of the business forecast report. Do you want to focus on a certain aspect of your company? Or would you rather assess your overall industry?
For a targeted approach, zoom in on the department you’re interested in assessing. For example, many business owners want to see what their sales could look like in the future, whether in a month (short-term) or over years (long-term).
Alternatively, for a broad analysis, zoom out and take a better look at your industry. Identify current and recurring trends alike, and see how you fit within the market.
Choose your forecasting model
Business predictions usually use one of two formats: quantitative or qualitative.
Essentially, quantitative models focus on objective data, while qualitative ones rely on people’s feedback.
If you want short-term predictions in your business forecast report, go for a qualitative method like market research. You can conduct surveys and interviews to make informed choices for your business strategy.
On the other hand, if you prefer a long-term approach, opt for a quantitative model. However, do note that this methodology is more complicated, and it often requires expert assistance.
Regardless of what business forecast report type you choose, make the most of the insights provided. At the same time, never rely strictly on predictions for making big business decisions.
Always consider additional factors and collaborate with specialists for the best results.