Revenue forecasting is a prediction about your income in a certain amount of time. Predictive analytics are based on data. Revenue forecasting can help you confidently decide to hire new personnel or spend the money on building skills in your current employees. It can help you navigate business plans for a month or a year.
When developing a revenue forecast, you begin with research. After partnering with G7 Tech Services, we will format your data architecture so that you can easily see the patterns and information your organization has gathered over the past year.
Consider the variables. Are there new products or services? What about significant personnel changes? Each variable is important, and when all the analytics are run and the data is combined, even small changes can have huge results. This intense data analysis is called quantitative forecasting. It is data-driven and objective.
Of course, there is always a human element to any successful company. Judgment forecasting is part of the human element. Experiences and intuition can’t be quantified and they are certainly not objective. But these two things can not be dismissed either. Using both quantitative and judgment forecasting can result in a solid revenue forecast. Data analysis paired with keen discernment contributes to a well-founded budget, enhanced decision making, and thoughtful hiring.
Forecasts are predictions that can always change
Here in Texas, we check the forecast often; our weather is always changing. Remember that your revenue forecast is not something to stick in a file cabinet each year. It is a living document that you are continuously viewing, updating, and consulting.