Preparing forecasts will help you to assess your likely sales income, costs, external financing needs and profitability. Financial forecasts are essential if you need to raise money from a third party, such as a bank.
Financial forecasting
General business
4 years ago
521
Financial forecasts are essential if you need to raise money from a third party, such as a bank.
Businesses engaging in international trade usually need much higher levels of working capital than businesses operating purely domestically because of the longer lag before you are paid, so good forecasts will help you assess whether you need to raise additional finance even if you think that you are already well-funded. Forecasts also provide you with the means to monitor performance on, say, a monthly basis and thereby exercise effective financial control – arguably the second most important management function in running a business (marketing is the first).