Getting On Top Of Business Forecasting

The only way to remain viable in today’s uncertain economy is to plan, but not in the old-fashioned way. The traditional three- to five-year strategic plans are out. In their place: agile, 18–24 month forecasts combined with robust scenario planning and stress testing.

Build Scenarios | Not Just Projections

Start by creating a realistic forecast covering the next 18 months to 2 years. Then model different scenarios around it:

• Business-as-usual: Assume flat revenue and stable costs.

• Mild downturn: Project a 10% revenue drop and 20% increase in input costs.

• Loss of key customers/suppliers: Map out the ripple effects.

Use these simulations to understand how each situation could affect cash flow, profitability, and resourcing. Then set contingency triggers. For example, if revenue drops for two months in a row, trigger a sales push. If that fails, consider operational cutbacks.

Thinking ahead allows you to act, not react.

Revisit and Refine Your Business Plan

Your business plan is the foundation of your forecasting model. It should include:

• Market and competitor analysis

• Organisational structure and key people

• Strategic positioning

• Sales and marketing strategy

• Products/services overview

• Funding requirements

• Financial forecasts

The best plans are living documents, updated quarterly, not filed away after a once-a-year review.

Pressed for time? That’s normal. But setting aside even one weekend to get your plan together could be the most valuable investment you make this quarter.

Use Simple, Practical Tools

You don’t need expensive software to get started. Every small business can — and should — build a basic forecast using Excel. Map out historical revenues, cost trends, and balance sheet figures to build a forward-looking model. If you’re unsure how, take a course or speak to your accountant.

Stay Close to the Front Line

Speak regularly with customers and suppliers. They often have early insights into shifting trends that can help you pivot quickly. For instance, your suppliers may see reduced demand from other clients — a red flag for your own sales pipeline.

Track Your KPIs Relentlessly

Quarterly reviews aren't enough anymore. Close your books quickly at month-end, and then:

• Run your scenarios against actual figures

• Monitor weekly sales targets

• Compare actuals to your forecast to spot issues early

This rhythm of frequent review and adjustment is what builds resilience.

Need help setting up your scenario planning or forecast models? Contact Dolman Bateman, we work with SME owners across Australia to build dynamic financial planning systems that respond to real-world challenges.

Used with permission from RAN ONE

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Disclaimer:

The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.