Respond to the following in a minimum of 175 words:
Forecasting is of utmost importance in setting up a new business. It is not an easy task to start a new business as it is full of uncertainties and risks. With the help of forecasting the promoter can find out whether he can succeed in the new business; whether he can face the existing competition; what is the possibility of creating demand for the proposed product etc. After discovering the business opportunity, he will see the possibilities of assembling men, money, materials etc. The success of a business unit depends upon as to how sound is the forecasting? Proper forecasting will help to minimize the role of luck or chance in determining business success or failure. A successful promoter is also the prophet of economic conditions. The importance of forecasting can’t be ignored in estimating the financial requirements of a concern. Efficient utilisation of capital is a delicate issue before the management. No business can survive without adequate capital. But adequacy of either fixed or working capital depends entirely on sound financial forecasting. Financial estimates can be calculated in the light of probable sales and cost thereof. How much capital is needed for expansion, development etc.
Forecasting is essential and would need to include research. How would you go about finding industry information to help with raising capital? How would you present your findings to say, a bank when attempting to get a loan?
