Forecast of business development – how to conduct it and why it is needed
Lately, there has been a feeling of doom. It seems that a little more and the business will have to close. I do not know what to do. If I close the business, I will actually be left without income. Is it possible to somehow determine, at least in general terms, what to expect from the business in the future? Is it possible to build a business development forecast for at least 5-10 years ahead? Can I find out how much is left for my business?
Business development forecast is the foundation
A business development forecast is like the foundation of a house. It is customary to start any business with it. It is not only possible, but it is necessary to build it. Many companies, especially Western ones, are actively engaged in forecasting every year, because they understand that the situation on the market is dynamic, not static, and will end sooner or later.
When the situation is about to end and when it is better to “get up and leave the game table" is better to know in advance. In our culture, it is customary to live one day, and there are many sayings about this: “there will be a day – there will be food”, “issues must be resolved as they arise”, and so on. Therefore, no one particularly makes forecasts, and if they do, it is purely formal, if only they were well, or if it is necessary to report to someone.
Most business problems are almost always due to the fact that a business development forecast was not carried out.
The result in 99% of cases is appropriate – "but things are still there." However, we are also approaching the moment when forecasting becomes relevant for us as well. This is due to the fact that the rate of change is accelerating and we need to adapt to this. Most business problems are almost always due to the fact that a business development forecast was not carried out.
The Benefits of a Business Forecast
There are many examples, but I see dozens of them. For example, a sick new house was built opposite me. Commercial premises are located on the ground floor of this building. The total number of premises is about 20. For about half of them, the owners have been looking for tenants for several years and cannot find them. Of course, money was invested in the premises, and quite serious money, which actually turned out to be frozen.
I am very interested in watching the change of signage.
The people who paid money for them expected to have a good income from renting them out, but in fact they only have costs. For the remaining premises, tenants have been found, but they are constantly changing. It is very interesting for me to watch the change of signs. Either they open a beer shop, then a grocery store, then a children’s shop, then a candle shop, then a travel company, then a hairdresser, then a sewing workshop.
Some work for a week, some for six months, but in the end they still close, and have received serious losses. My trained eye immediately determines who will be able to hold on and who will close very soon. If they had made a business development forecast in advance, they would have realized that their business in the format in which it exists would not last long, and would they understand why.
What gives the construction of the forecast
One of the stores was once on the verge of closing. It so happened that I went into it and gave some recommendations. Surprisingly, they listened to them and did what I said. As a result, the business only lasted another year due to these recommendations. However, in the end, it closed anyway, because after these recommendations, nothing else was done, and they, of course, eventually exhausted their possibilities.
There are different types of business development forecast
A business development forecast can be of different types. You can predict whether the business will go at all. You can predict how long the business will remain relevant and generate income. You can predict the scale of business development. Why is this all possible? This is because business is basically an idea. If the business is built correctly, if it corresponds to the idea that underlies it, then it will 100% go.
As long as the idea that underlies the business is relevant, it goes uphill. But over time, any idea loses its relevance, and the business that is built on its basis ends accordingly. The relevance of the idea is gradually decreasing, which makes it possible to predict the life of the business. So if you build a business development forecast, with a high degree of probability you can find out whether it will go, how long it will last and to what level it will grow.