First, an announcement: this will be the last post by your humble blogger here at Merchant Advance before moving on to what are hopefully bigger and better things. Thanks so much for reading, commenting and hopefully being interested by what I’ve had to say for the last couple of years. With that in mind, as the blog transitions to a new and probably fabulous content creator to keep bringing you the best of small business news and financial technology insights, today’s blog turns its eye toward the future as well.
Small businesses are increasingly transitioning to be run by individuals with different sets of goals and challenges than their forebears, and who may also have different sets of skills with which to meet those goals and overcome those challenges. The mechanics of success are always changing – marketing automation, e-commerce, AI, contactless payments, the gig economy, you name it – as are the mechanics of services that offer support to business owners.
Forecasting and analytics – looking toward the future intelligently and planning based on the statistical information you find there – will not only help small businesses prepare and plan their business models to anticipate change, but will continue to expand the reach and power of alternative lending and financial providers like Merchant Advance whose goal is to offer businesses the resources they need.
Forecasting can be a difficult process for some small businesses because the numbers, or quantitative data, don’t necessarily tell the whole story. The qualitative aspect of small business can be a strong influence: what opinions do customers have? Why? What influences their perception of your business in ways that go beyond pricing? These are the kinds of elements that don’t fit into a mathematical model. An effective small business forecast will do the research it needs in order to account for them.
In order for your small business forecast to succeed, you will not only need to forecast for your expected cash flow and revenue, but for the worst-case scenario. What would happen if sales bottomed out? Could you stay in business? How? Controlling your credit and investigating opportunities to supplement your business cash flow will be critical in case a worst-case event comes to pass.
Though it may be tempting to peer further and further into the future of your business, it’s also important to keep an eye on what you have on the burner right now. Staying focused on your customers, your team, and your incoming and outgoing payments are critical to achieving the stability you need, and generating the insights you can use to start forecasting if you haven’t already.
With that knowledge, you can move your small business to the next, best and greatest phase of its life just as a person moves from job to job or place to place seeking the fulfilment that they dream of.
Best of luck. Keep learning and keep working.