Often small and medium businesses do not give due consideration to the need for future planning and predictive forecasting. This article is directed at those small and medium St. Petersburg Florida businesses that believe they have not tightened up their operating systems enough to weather the current recession with the intentional inflation pattern created by the FED and survive.
Macro influences should be given higher than normal precedence in forecasting right now. What the FED does right now will eventually affect you – maybe in the next six months but progressively more than likely in the time afterward. St. Petersburg Florida businesses it is time to wake up and examine your small business not from profitability standpoints but its relationship to and how it can survive the macro environment it lives in. Financial forecasting must be employed to predict the future of your company.
Yesterday the FED and Ben Bernnacke decided to buy back six billion worth of their own bonds in another round of printing paper money and then using that paper money to buy back their own bonds hoping to stimulate our economy. I predict that instead of forcing our economy out of the doldrums it will create only a measure of inflation. No matter what you think of the FED action it will create some inflationary tendencies on prices. Therefore it is your responsibility as a small in St. Petersburg Florida to start planning for the future.
So how can you plan for that? By doing some predictive financial forecasting and running reasonable analysis programs to assist you. At the end of this article there will be a series of website links to help in understanding financial forecasting and making your first forays into helping yourself served by nature macro influences that will pressure the money supply in the United States creating an inflationary spiral.
Financial forecasting traditionally uses a series of mathematical models that you plug information into. Trend analysis for time series forecasting is the most common as it seeks to give reasonable answers to future trends using historical data you provide. Often this is done to calculate future inventory needs.
The data is acquired from your own records and is pertinent and relevant to the future answer you were looking for. Remember you don’t mix apples and oranges on this data, if you are hunting for future “orange” forecast needs then use only passed on “orange” historical data for calculations.
Data applicability is absolutely necessary to obtain a reasonable and proper result in financial forecasting. The old adage, “garbage in – garbage out” is very appropriate when determining which data to use to then plug into a mathematical model to calculate your projections for the future. Understanding your results using forecasting mathematical models is important. Go slow, use the Internet for references and explanation because you can do this yourself.
Here are some links, excel videos and freeware related to this topic: