How do you use forecasts? – Harvard Grace



Failing to plan is planning to

Or perhaps I should ask: do you use forecasts? Asked still another way: Are you running your business, or is your business running you?

We tend to tire of familiar sayings, but they are often true and filled with sage wisdom garnered from the mistakes of those who went before us. That’s why I like to hold onto a few of them. One of my favorites? Failing to plan is planning to fail.

I don’t like planning. I don’t like making detailed calculations based on assumptions only to have those assumptions made irrelevant almost as soon as the plan is completed. It feels like a waste of time.

I love the feeling of making decisions in the moment as problems or opportunities arise. I’ve been successful at it. This is why fans love star athletes, because of their abilities to succeed at making split decisions in a constantly changing situation. Business, however, is not a sport, and the fact of the matter is: athletes couldn’t possibly make all those great moves without practice & preparation… which sounds an awful lot like planning.

Planning is essentially practice for business. What I do with my clients is a monthly (sometimes more frequent) forecast with at least two scenarios. If you are trying to make a big decision, you may need to run more than a couple scenarios.

And yes, even forecasting requires practice. The more you do it, the better you will get at it. Planning takes time. It requires discipline to stay committed to it. If you are ruled by the tyranny of the urgent, you will have to restructure your work life to do it. Before too long, though, you will see the benefits and maybe even start to enjoy the process.

To that end, I’m going to spend the next few weeks writing about various aspects of forecasting, so stay tuned. In the meantime, these articles have helped shape my thinking on forecasting:

https://hbr.org/1986/01/managers-guide-to-forecasting

https://www.entrepreneur.com/article/248498

https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/bringing-a-real-world-edge-to-forecasting

https://www.inc.com/guides/201105/tips-for-improving-sales-forecasting.html

https://www.smartcompany.com.au/partner-content/article-series/finhacks/need-revenue-forecast-create-one-actually-works

For more reading recommendations, or to discuss other entrepreneurial tips and tools, contact Harvard Grace Corporation at stewart.heath@harvardgrace.com.



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