As business owners and marketers, we have likely asked the question “How do we investigate and understand the past so that we can confirm our predictions for the future?” Predicting the future is important for several reasons, not least being to ensure the survival and longevity of any business. But how do we make these predictions? The answer lies in data-driven analysis and business forecasting.
In order for a business owner or marketer to start making predictions, engaging in business forecasting is crucial. According to Investopedia
“Forecasting is a technique that uses historical and present data as inputs to make informed estimates that are predictive in determining the direction of future trends”.
In short, business forecasting is a planning tool which assists businesses in analysing historic patterns which in turn enables them to make informed business decisions, manage uncertainty and risk, and optimise future results. This may be done for a variety of reasons, such as to forecast sales, expenditure, and profits, or to optimise marketing strategies.
What is Historical and Present Data?
Historical or present data is collated data relating to previous circumstances and business efforts relevant to a specific topic. The starting point of business forecasting involves collating said data from various sources in anticipation of predicting a future outcome. There are two types of data: quantitative and qualitative data. Quantitative data reflects concrete, statistical information in numbers, and qualitative data is descriptive, meaning that it can be observed but not measured. While market research was once a lengthy process involving many variables, today there are various online tools which make this process much more time-efficient and user-friendly.
How Technology Has Affected the Way in Which We Collect Data?
With the advent of technology, primarily the Internet, smartphones, and Bluetooth, how data is collected and used today is far more intricate and precise than…