6 Reasons Why Demand Forecasting Is Important In International and National Businesses

Demand forecasting is a well researched topic, and the most methods used in today’s businesses are relatively new. Setting out goals on sales promotion in international or national business without having relevant knowledge is like jumping from a mountain without having a parachute in your hands. I often find that the first thing people ask me at a conference is the importance of demand forecasting for their companies. In this article I will point out 10 reasons why you need to consider it for your business.

1) Many businesses nowadays provide services and products to their clients without having a clear figure of their demand. Sometimes what they know about their consignments is the deadline they should meet, but missing a proper demand forecasting plan can lead them to not appropriately react to the changes. When a customer is unable to get the product or they want more than once, it can make them to choose the competitor’s product.

2) Marketing gurus of your company may not perfectly promote your sales in case you do now know how much is necessary to produce. If you company overestimates demand, it has a risk of producing too much which can lead you to loss due to holding unsold items. But if it produces too little, there will be a loss of potential profits and your marketing team can not help you in this case too.

3) With the growing tends of globalization and wide range of items in the market coming with different shapes and sizes it is also important to track the demand for each product. The demand for small audio sets, touch-screen audio sets, Bluetooth-enabled audio sets should be considered separately keeping in mind all customers needs.

4) In business battles, especially in international businesses the future prices and costs are not always stable. Demand forecasting should be tied with all profit margins considering the prices and the costs of your production.

5) Changes in technology have contributed towards globalization. The improvements of technology make our lives much more convenient therefore the rules of the game are changing. There should be forecasting about technological change (TC) and its bear upon demand, costs and prices.

6) Besides these all, demand forecasting should be based upon changes in the external environment. As we know a business doesn’t operate in a vacuum. It has to act and react to what happens outside the factory and office walls, and sometimes outside from national borders. With this in mind I want to close up with the 6th reason why it is fundamental for your company.

Young Men in Business Battling the Good Ole’ Boy Network

There are two ways to do business in a city or town in the United States. You can go with the flow and work with the establishment or your can take your entrepreneurial talents, hard headedness and will and ram it up their ass. What do you mean you ask?

Well lets take any city in the US for instance, there are folks in business, good ole’ boy networks established and they work hard to make sure they get the juice. It is the same way in Nationally run businesses with lobbyists, associations and political favors.

Adam Smith warned us of this, it is not a new thing. It is pretty disgusting if you ask me. You would think that companies with all the juice and power grew their businesses to that size by competing in hard fought markets and industries. But they grow old and tired and why work hard when you can pay your government to run interference or run block from your competition so you can continually score goals. Why bother working hard if you don’t have too? Indeed, isn’t that human nature?

This is the way it has always been done, it is the reality and the way things are. If you think it is anything else you are full of shit. It is what it is and you will have to deal with it or risk being pummeled from out of the blue. Before you start a business you should probably check who your competition is, which clubs they belong too and who their friends and relatives are in a community. If they are too politically connected you need to be extremely careful while risking your capital in a business.

Let me tell you a story; You see when first starting out in business I was into car washing. And I found just such a competitor well connected in the city. Well it was an Owner of a carwash in Thousand Oaks CA in 1990. I had taken clientele from him due to better quality, lower prices and quite frankly better service. Although I must admit, as good as we were, the car wash owner was really no competition, the service was mediocre at best.

When we did a car wash fundraiser across town he went to the city and complained about these kids polluting. He could not complain about us, we were helping for free. The wash water run-off never made it to a storm drain as it flowed into the grass. But that did not stop him from shutting down the operation and immediately the code enforcement the next day came to our business and started going through the book looking for something to get us on? As you know CA is always like WA, MA, MD and FL first to implement environmental legislation and CA is the worst state to do business in with all their over regulation on everything from ridiculous labor laws to fines for ascetics.

The well-connected car wash owner gentleman’s name was Jack Galley and he is now dead. He was getting older and probably our competition and refusal to submit to his attacks finally killed him. So what, he cheated, and used his connections and abuse of power to attack us, we were a great company back then, we deserved the customers, so screw him. As his health started to fail him he sold his car washes to Wash Depot, a car wash consolidator, because he could not maintain volumes during illness and competition increasing in the area, mostly from us.

During that time, I watched the local carwashes from fifty miles come together and form a small association and go after our company during a 2-year battle with City Hall, planning commission, council, city attorneys office, public works and court room. We finally won, in the media, courtroom, city hall and in the Market Place.

We refused to give up, never give up. So suffice it to say; “You can go with the flow and work with the establishment or your can take your entrepreneurial talents, hard headedness and will and ram it up their ass!” We choose the second option. Most who try this lose. Personally I am not into losing. But I advise small business owners starting out, to be a little less hard hitting and go a little more with the flow.

You see often “discretion is the better part of valor” but if you are forced to, sometimes you have to fight to be a man. Think on this in 2006.

Business Process Management

Hit two birds with one stone! Properly applying business process management to your company can conveniently aid both target clients and business firms alike. Having an end to end process that can actively point out what your customer wants and make it work for the benefit of the company is one of the simple formulas for success. Run your business with a sharp approach using this method.

This process offers a sense of balance and continuity to your business. Balance in a way that the cycle of expenses, costs and tasks are in perfect harmony. The procedure allows your business to be constantly balanced by adjusting factors that can get always get your company back on track. Continuity is expressed through having a steady and consistent flow of work that is produced through this process. Growth and development does not cease within the company, it just goes round like a wheel, constantly changing and improving.

It is a straight forward process that can effectively determine the necessary steps that your company has to take so that it can deliver what your client requires of you. It is the kill switch of all business battle plans as having a competent business process management can either make or break your company. This is a tool that can help your employees understand their specific duties so that they can accomplish their work more effectively.

It is a constantly evolving mechanism that allows your organization to constantly improve and develop so that you are able to meet your goals in an efficient manner. It also expresses qualities of adaptability, as steps and processes can vary over a period of time depending on the current needs of the company. Successfully track your company’s standing and act upon weak spots and exploit strong points.

Dynamically identify and organize future actions plans for your company. The process allows you to forecast future challenges within your company so that you can take the necessary action to preempt these future problems form from happening. This is a most useful attribute that can definitely give your business the edge over the competition.

Pro actively incorporate business process management into your business and immediately feel the impact it brings to your company. You will no longer venture blindly into the business world. Use this process to be a step ahead of everybody else. Never worry about external and internal challenges ever again.