Why is a business development forecast necessary?
He started doing business at the university. There were not enough scholarships, so I was spinning to earn at least some money. I have never worked for my uncle and am proud of it. He achieved everything himself. In 20 years, much has been achieved. At first, the business developed perfectly. I earned money, solved my questions. Everything was going fine, so I did not even think about opening another business.
But lately there is a sense of doom. It seems that a little bit more and business will have to close. I do not know what to do. If I close the business, I will actually remain without income. Is it possible at least in general terms to determine what to expect from 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?
The business development forecast is the foundation
The business development forecast is like a foundation for a house. With him decided to start any business. It is not only possible but necessary to build. Many companies, especially Western ones, are actively engaged in forecasting, and every year, because they understand that the market situation 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 gaming table” is better to know in advance. In our own culture, it is customary to live in one day, and there are many sayings to this effect: “there will be a day — there will be food”, “issues need to be solved as they arise” and so on. Therefore, no one especially builds forecasts, and if it does, it is purely formal, just to be well, or if it is necessary to report to someone.
The result in 99% of cases turns out to be appropriate – “and things are there.” However, we are approaching the moment when forecasting becomes relevant in our country too. This is due to the fact that the rate of change is increasing and it is necessary to adapt to this. Most business problems are almost always due to the fact that a business development forecast was not conducted.
There are many examples, only I see dozens of them. For example, in front of me they built a sick new home. On the ground floor of this house are commercial premises. 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 ones, which actually turned out to be frozen.
People who paid money for them hoped to have a good income from their rental, but in fact they only have expenses. For the remaining premises, tenants have been found, but they are constantly changing. I am very interested to observe the change of signs. They will open a beer store, then a grocery store, then a children’s one, then a candle shop, then a travel company, then a hairdresser, or a sewing workshop.
Some work for a week, some for half a year, but in the end they close anyway, with serious losses. My trained eye immediately determines who will be able to stay and who will close very soon. If they had previously made a business development forecast, they would understand that their business in the format in which it is there will not last long, and they would understand why.
One of the shops was on the verge of closing. It so happened that I went into it and made a few recommendations. Surprisingly, they listened to them and did what I said. As a result, the business only through these recommendations stretched another year. However, in the end, it still closed, because after these recommendations, nothing more was done, and they understandably eventually exhausted their possibilities.
The forecast of business development is 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 revenue. You can predict the scale of business development. Why is this all possible? That’s because business is basically an idea. If the business is built correctly, if it fits the idea that underlies it, then it will go 100%.
As long as the idea behind the business is relevant, it is going uphill. But over time, any idea loses relevance, and the business that is built on its basis accordingly ends. The relevance of the idea decreases gradually, which allows us to predict the time of existence of the business. So if you build a business development forecast, it is very likely that you can find out if it will go, how long it will exist and to what level it will grow.