Forecasting is a major part of running a business. Even though you can’t tell the future, you can make an educated guess about how much you’ll bring in next year, how much you will spend, the way sales will fluctuate, trends for your business, and so on. Forecasting gives you a solid foundation to build on, but it does take a lot of analysis to be as accurate as possible, even though you never know what the economy will do or what the following year may hold.
When you use the power of artificial intelligence (AI) to help you forecast, you can make your “educated guesses” even more detailed and accurate than ever before. Because it has the ability to sort through massive amounts of data, analyze it, and display the most important and relevant information to you, AI will enable you to be even better prepared for the year than with your regular forecasting method.
The Process of Forecasting Without AI
If you’re forecasting without the help of AI, there’s a lot of data you’ll need to consider and information to sort through. When forecasting, ask yourself a series of questions:
How will the economy affect my business? Unfortunately, the economy is something you can’t control, but if you keep an eye on it and watch for trends, you’ll be able to better predict what the next year will be like and prepare accordingly.
What upcoming trends will affect my business? There are new trends every year—some within the business world and some among consumers. If you’re a clothing retailer, for example, you obviously need to keep up with seasonal clothing trends, but you may want to keep an eye on the increasingly popular digital currency market and offer it as a payment method sooner rather than later.
Do I have all of the resources and suppliers that I need? If you’re planning to launch a new product or have recently experienced growth, it’s important to have the suppliers, resources, and vendors you need in place before everything launches. You’ll want to make sure you have everything you need lined up to ensure everything goes smoothly.
How effective is my sales and marketing strategy? To answer this question, you’ll need a lot of data. There are a number of ways to determine the efficacy of a campaign—you can look at how many conversions a certain landed or how much traffic a specific campaign directed to your site. It’s important to analyze what is and isn’t working so you know what to change going forward.
What is my current financial status? The amount of debt you have, number of assets, risks and liabilities, and so on should all be considered when forecasting. If you’re expecting to have a good year, you’ll want to decide what you want to pay off first or what it is you need to buy.
Where can I improve? Ask this question as you analyze each area you’re forecasting. When it comes to sales, are your salespeople motivated and excited? Are your ads performing as well as they should be? When it comes to finances, have you been sticking to your budget or consistently going over in a particular area? Analyzing each section for places you can improve will help you get ready for the next financial year.
The Process of Forecasting with AI
Using AI to help you forecast doesn’t mean you will be able to skip the forecasting meetings altogether and let the computer do the work. It will make things significantly easier, though. Instead of all the manual work traditional forecasting requires, you can automate the process and get deeper, more insightful data.
For example, when examining your advertising and marketing, AI can gather massive amounts of data, sort through it all, pinpoint what’s performing best and why, and tell you where to improve. It can also better narrow your target audience to make your marketing efforts more effective, giving you a better return on investment.
Another great example is supply chain forecasting. AI can accurately make predictions and identify trends based on historical data and other information to help you be more efficient the following year.
Forecasting is extremely important for any business, and with the help of AI, you can make forecasts more easily and accurately. From getting deeper insights to more accurate trend predictions, AI is a must for your business forecasting.
If you have any questions about our AI-powered platform and how it can help you, contact us now.