Being honest about what you do not know.
WHY FORECASTS ARE WRONG
They assume the future resembles the past.
WHAT AFFECTS ACCURACY
How stable your business is How far ahead you look How much depends on few customers External conditions
THE CONCENTRATION POINT
A business depending on few customers has inherently uncertain forecasts.
WHAT TO PRODUCE INSTEAD OF A SINGLE FIGURE
A range, with the assumptions stated.
WHAT TO STATE
What the forecast assumes What would make it wrong How confident you are
WHAT TO TRACK
Forecast against actual, over time.
WHAT THAT TELLS YOU
Your typical error, which becomes your range.
WHAT TO DO WITH A CONSISTENT BIAS
If you consistently forecast high, adjust.
WHAT NOT TO DO
Present precision you do not have Extend a forecast further than the data supports Forecast to a level of detail that implies certainty
WHAT TO REMEMBER
A range honestly stated is more useful than a precise figure that is wrong.
