Why Should Businesses Forecast?
Businesses use the forecasting of sales and profit to plan, organise, implement and control their activities for a period of time.
The success of numerous activities depends on the accuracy of the forecast.
Over the years we have experienced sales people who have over exaggerated their forecast which in turn have left businesses in a total mess because they wait for long periods of time to measure results.
Historically businesses planned for short, medium and long term – which equated from one to longer than 5 years.
Today’s market place is so volatile that is important to forecast annually but measure on a monthly basis to ensure that the company is on track to achieve their goals. If changes are required they can be made rather than waiting until it is too late.
Sales teams used to measure their performance against sales turnover however moving forward it is important to measure on both sales and profit.
Tags: annually, businesses, forecasting, market, Measurement, performance, profit, Sales, targets