Most of you probably spent a good deal of time during the last few months of 2008 submitting your budgets, projected numbers, and even goals for the fiscal year 2009. All of the figures are documented and a single forecast put together for all of the stakeholders surrounding the company. For most companies forecasting is a very important process to keep the stakeholders informed of progress, create accountability, and to aid in budgeting. Those key purposes make forecasting a necessity for any company of size, but what about a start-up? Of course a business plan covers most of these areas but how important is a yearly forecasting routine in the early stages?
I find myself using analogies over and over, so why make today any different? Forecasting numbers for a start-up company plays a very large role in business development and one of the largest benefits of forecasting is identifying a realistic vision of where you see the company at the end of the year. Here comes the analogy. Ever heard of GPS, Garmin, TomTom, or VZ Navigator? I thought you might have. The idea of navigation systems is becoming commonplace, whether it comes equipped in your vehicle, given to you as a holiday gift, or downloaded to your fancy touch screen phone. There is a reason they have become so popular and they all have one thing in common; they help us get where we are going but they won’t get us there unless we identify a destination.
Forecasting is the best way to identify the next destination for a start-up company. Just like your favorite navigation toy, you can’t get where you going until you have identified your destination. Getting in a car and driving without a determined end point can be a waste of time and miles. So how can you take your start-up anywhere, unless you know where you’re going? Forecasting does a lot more than relay progress to stakeholders, create accountability, and aid in budgeting. It is the necessary destination when creating the roadmap to your success.