How to Predict Future Growth and Set Your Business on the Road to Success
Posted on 23rd October 2015 in Forecasting
Written by Amy Harris
Successful businesses don’t succeed just because they have a great service or product. They thrive because they’re always ready for what’s coming. - 3minute read
Great companies make sure they are prepared to deal with success by forecasting growth and considering different scenarios of how the future might look. That means they know where to invest, how to allocate resources and what preparations to make for each stage of their journey.
That has always been easier to talk about than achieve. But, like every other area of our world, new technology means that now it’s easier than ever for even the smallest of SMEs to plot a detailed path from local to global superpower. So how best can you predict your growth and set out to take on the world?
To predict the future you need to understand the present
Forecasting is key. You can’t grow without knowing what you have to build upon. Think of it like a health check – shining a light into every nook and cranny of your organisation and revealing what needs a little boost or trim.
You need to consider all your outgoings and ingoings; what your staff situation and hiring needs are; what assets and liabilities you possess and so on and so forth. Once you have this this in place, you are in a position to start forecasting.
Now you are no longer making decisions based on hunches, but on facts. You’ll be able to see what needs addressing, what needs investing and even what needs axing. A path to prosperity should start to emerge.
Manage your financial data, don’t let it manage you
A critical factor in forecasting is how you manage your financial data. Do you spend an hour sorting it out now or several hours every month digging yourself out of your backlog? Too many entrepreneurs don’t get this bit right and suffer continuously.
Spreadsheets are fine when you are starting out and only have a handful of clients. But this isn’t a scalable, reliable process and the more business you get the less effective it becomes. You can easily end up spending more time with Excel than working on your bottom line.
Innovations in cloud accounting mean SME owners can now make their data accessible in real-time when and wherever they want it.
This changes the game. Because with your data in the right software, you can move on from using your accounts as a historical, backwards record to utilising it as something that helps you make better decisions today and plan for your future.
One of FUTRLI’ biggest strengths is that one accurate forecast can drive multiple different scenarios and this can fuel daily decisions. Creating your forecast used to be a heavy-lifting piece of work that usually was printed out just once, sent to the bank and then left to sit on a desktop – perhaps never referenced again (or at most dusted off once a year). Even worse, it could easily just look like a wall of numbers, rather than a practical, living document that helps you plan.
Once you have your forecasts in place with FUTRLI, it takes seconds to visualise different scenarios. If you want to see what winning that coveted client would do to your annual profits, then it can be visualised in just a click or two. Furthermore, you can run scenarios simultaneously and view them side by side, helping you get a better grasp of your options and take the fear away from making the wrong decision.
Success you can see
Good forecasting and scenario planning can both secure and accelerate your SME’s growth.
Nobody can ever know 100% what the future holds, but firms that invest in forecasting are at a major advantage over those that don’t.
History is full of companies with great ideas that fell by the wayside due to lack of foresight and planning. But with FUTRLI future-proofing your business, you don’t need to be one of them.