Chart a course
If you aim for nothing then this is probably what you will get. With a forecast, however, you can set yourself a route map of what you are trying to achieve. There will be successful periods to take advantage of and periods where business will be quieter, but the forecast allows you to plot this path in advance and prepare for it appropriately so you can maximise results.
Measure your progress
Survival in business relies on constantly checking progress and analysing success. With a forecast, you have a course to measure yourself against and this allows you to see if you are performing at your full potential. This, in turn, will help you to recognise shortfalls and take steps to rectify them.
Perhaps most importantly a forecast will give you an idea of what level of funds you will have available to spend as a business. This is important in ensuring that you can pay staff, keep operating and have enough cash flow to invest to complete jobs. By forecasting, you can predict shortfalls that will allow you to save for a rainy day.
While most businesses recognise the value of financial forecasting, the most common reason that it is not carried out is because of a lack of confidence in making these predictions. Hiring staff to manage and forecast finances may be too expensive, but seeking help on this matter can help you to improve your business performance and cash flow too. A virtual CFO or part-time CFO will be able to help you with financial forecasting that will help to anticipate the cash flow for your business and work towards improvement. Financial forecasting is vital in any business so it is worth the time and money to set out your year ahead.