Using data to anticipate.
WHAT IT DOES
Uses historical data to predict future values: demand, revenue, churn, failure.
WHERE IT HELPS
Stock planning Demand forecasting Identifying customers likely to leave Predicting equipment failure Cash flow projection
WHAT IT REQUIRES
Historical data, in quantity, with the pattern you want to predict actually present.
WHAT IT CANNOT DO
Predict genuinely unprecedented events. A model trained on normal conditions fails when conditions change fundamentally.
THE CAUTION
Forecasts are estimates with uncertainty. A single number presented without a range is misleading.
Ask for the uncertainty as well as the prediction.
FOR SMALL BUSINESSES
Simple approaches frequently suffice: seasonal patterns from last year, moving averages.
Sophisticated forecasting on thin data produces confident nonsense.
WHAT TO DO FIRST
Record your data properly. You cannot forecast without history.
Most small businesses lack the data more than they lack the technique.
