Many advisors and managers live and die by their forecasts however forecast are exactly that, just forecasts and should be taken with a grain of salt. Instead if you really want to know you’re business’s future a SWOT (Strengths Weaknesses Opportunities and Threats) analysis will give you a far more reliable picture.
See its one thing to generate a set of numbers using excel spread sheets based on trends and patterns however in an every changing economy like we’re in today, these statistics don’t apply. Instead taking a hard long look at your business using the SWOT principal is far more likely to produce confidence, or lack their of, in your future.
Too many business owners rely too heavily on financial forecasts. Some even spend the money as if it were already banked. The truth be told today’s economy is superman’s kryptonite and therefore practical analysis is more important than numbers.
A SWOT analysis will provide you the practical and potential practical implications of your surroundings. It’s the results of this that your forecasts should then be based upon.
This isn’t to say you shouldn’t forecast however do it with as much practical research as possible and always always, keep enough money in the bank in case your forecasts don’t come to fruition.