These are the top three common mistakes in forecasting that could be costly for your business:
Relying on gut feeling: Hunches, guesses, and gut feelings are unreliable bases for important business decisions. Make your decisions based on solid and realistic data from your sales forecasts.
Ignoring historical patterns: In order to properly allocate a budget or generate a sales forecast, you need to consider historical data on demand and sales patterns. These patterns provide you with a baseline for predicting future sales.
Failing to be flexible: When creating your sales plan and budget, be prepared to make any changes if there are sudden declines in your sales trend caused by seasonal factors. For example, you should adjust your inventory if there is a big sale coming that was not previously anticipated.