Forecasting Business

Predicting the future is a difficult task. Businesses, especially small ones, must constantly adapt to the forever changing market.

Watching for changes in the market will help when the economy is expanding and contracting. In Kevin Johnston's article What is the Relative importance of Forecasting, he believes that adjustments can prevent surpluses and deficits. The concept of adapting to behaviors within the market is appealing because it is a simple idea to follow and maximize sales. How does forecasting the market help sales?

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Predicting the demand of a product will give an estimate, or an exact number, for how much to produce. Understanding the supply and demand in the future will make planning a budget easier.

After reading about forecasting and how it assists a company, questions still remain. What happens when the predictions are wrong? How does the company bounce back from incorrect forecasting? When a company finds the pattern in their system, will every prediction follow the trend?

Written by: Colin Bergman
Kevin Johnston. "What is the Relative Importance of Forecasting." Chron, 2017, http://smallbusiness.chron.com/relative-importance-forecasting-35627.html