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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.

The Small Business Dilemma – A New Zealand Perspective

The owners of small businesses have to cover many roles across their business and often with little support. They need help to achieve the success they seek, but in many cases they either don’t look for it, or they have trouble finding the right help at the right price.

Many of the advisors, banks, funders, and all those servicing small business have difficulty helping them. These businesses are fragmented, costly to engage with and most service providers can’t offer even the most basic support and make it financially viable.

So why does this matter?

Consider these figures from Statistics NZ. (The percentages are not dissimilar in other countries)

1. Of the 480,000 businesses in New Zealand around 425,000 have five or fewer employees – micro businesses
2. Approximately 325,000 have no employees.
3. Unfortunately micro business are 10 times more likely to fail than larger organisations.
4. The service and support available for business in New Zealand tends to be focused on larger organisations, exporters or businesses with high growth potential. Very few of the micros in New Zealand fit into these categories and simply do the best they can.

Business owners need to find the best support they can afford. New Zealand’s DIY attitude may often mean micro business battle on alone, hoping to sort things out but often slipping further into difficulties.

Owners need to think about the unique challenges of owning and running a small or micro business.

Succeeding in a micro business must start with recognition that business, family and personal lives connect in ways that don’t apply to bigger businesses. The challenges of small businesses are often unique, so looking for solutions that ‘the big guys might do’ often won’t work. Most micros start for lifestyle reasons. They are owned or operated by families or people in relationships (e.g husband and wife). The owners are typically juggling not only every aspect of the business but also the needs of the family “.

So if you believe this describes you consider a few things:

1. Accept that you have many roles to fill in your small business.
2. Accept that you can’t be good at all of them nor will you enjoy all of them.
3. Seek out help. It is out there and you may have to spend some money to get the help you need.
4. You can’t do it all. You will have limited time and money so you have to prioritise.
5. Be kind to yourself. Small business can be tough and if you don’t care for yourself you won’t be able to care for your business.

Exclusive Business Strategies – Your Business Battle Plan

WRITING A BUSINESS BATTLE PLAN

Your business battle plan is one of the most important documents you will ever create as an entrepreneur. It will guide the direction of your company and also give potential investors a blueprint of the company’s structure, commitments, daily operations, and future objectives.

There are entire books-LONG books-about how to write a business plan. Reading a few of them is a great way to educate you. But meanwhile, let’s focus on the basics. What you really need here and now in the trenches is a simple plan that starts with where you are and what you’ve got and gives you a clear direction about what to do next.

The consultants and fancy graphics and appendices may or may not come later, but the kind of plan I’m talking about right here, right now, is one that covers the basics, one that you will understand and USE as a day-to-day action plan.

• Start by writing a detailed description of the business and the nature of the product or service you are offering.

• What is the purpose of the business and why does it exist? What drives the passion that made you start this business? These answers will become your mission statement.

• Make a list of competitors who offer the same product or service and point out how yours will be different and/or better. Dissect your competitors’ strengths and weaknesses as compared to yours.

• Who are your customers? How will they find you or how will you find them? This is the raw beginning of your marketing strategy.

• What are your revenue goals per month? Per quarter? Per year?

• What systems have you put in place to produce and deliver your product or service? To reach customers? To collect payment? To provide customer service and follow up? Think of all the steps in your process and the systems that will support them.

• How will you track all your actions and results?

• Write a 60-day action plan.

• Write a daily action plan for the next seven days.