![]() ![]() It enables you to gauge how much revenue you’ll potentially earn in a particular period and plan for big expenses.įurthermore, this process is necessary for a business to be approved for a government loan through the CARES Act. What is forecasting?įor small business owners, forecasting is the process of looking at past and present data, as well as marketplace trends, to predict the company’s future financial performance. There are easy ways to plan for your business’s future, even amid the severe uncertainty brought on by the global coronavirus pandemic. “Small business owners are passionate about what they are doing and don’t love the financial aspect of running a business, but it’s a crucial piece of being successful.”įorecasting doesn’t have to be a source of dread. ![]() “Many business owners avoid forecasting because it’s tedious or intimidating,” Clare Levison, a CPA and member of the American Institute of Certified Public Accountants Financial Literacy Commission, told Business News Daily. Without looking into the future, you won’t be able to prepare for the worst – or be ready for the best. That’s true whether you have five employees or 50. Planning for the future in uncertain times may seem futile, but now more than ever, forecasting should be top of mind for small business owners. This article is for small business owners who want to learn how to properly conduct financial forecasting.Most small businesses should focus on their cash flow, sales and expenses when starting to forecast.Forecasting has become a necessity during the pandemic, with businesses forced to show their expected payroll to get government-backed forgivable loans.Forecasting may conjure up feelings of dread for business owners, but it’s a necessary part of running a successful business. ![]()
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