Forecasting Tip #1 – Distinguish between forecasts and targets

This is the first in a series of tips on forecasting. These will run alongside our tips on Pricing (and maybe others to come).

A forecast is a statement about events whose actual outcomes have not yet been observed. In business, forecasts are made to help manage operations, cashflow and expectations. Risk and uncertainty are central to forecasting.

A target on the other hand is an outcome that is set in order to drive or monitor performance of an individual or a team.

Forecasts and targets can be confused, particularly when setting budgets. In situations where the two have been confused there can be a tendency to stick with an out-of-date target (budget) rather than moving on to a new forecast of new outcomes based on the latest information about the current situation. We have more to say about budgeting in the future.

Please let us hear your forecasting tips by contacting us.

Forecasting Tip #2 – Always forecast a range of outcomes

If you would like to find out more please get in touch.