to confidently forecast demand. It's essential: Having a good idea of what's coming may improve customer service, but it can also make a big difference in sales and profits. Where do you begin? There are nearly as many ways to forecast as there are business owners. Some companies forecast informally - a gut feel, or a few numbers scratched on the back of a cocktail napkin. Some pay statisticians to work with expensive software to develop predictions of the future. Regardless of method, few forecasts are ever right. The issue is not getting an accurate forecast; the issue is getting one good enough for the decisions at hand. It must be worth more in the information it provides than it costs to develop. So how do you do that? Software alone is not the answer, and may not be the answer at all. As you work to improve your ability to see the future, consider these four key steps to shaping a forecasting strategy that will work for your business: First, understand your business. Your understanding of your business is more important to good forecasting than almost any other factor. Don't leave forecasting to the software or the equations. Make sure you can say, "This seems reasonable" for both the forecast model used and the forecast itself. For example, your industry may have an annual show in November that always pumps up demand. Since your historical data reflects that bump, a statistical forecast of future demand would also plan that