Business forecasting is an act of predicting the future

Human conduct is governed by expectations. We are all interested to know something about the future. In fact, whatever we do at present is in the expectation that certain events will take place in future, based upon our past experience, forecasting of future event is, thus, engrained in human nature. Business Conduct is also similar to human conduct. As soon as a person enter into a business, he has to make a series of forecast as regards to the demand of the product, availability and price of the raw material, the requirements of funds, and future sale, etc. Success in business depends upon the correct predication about future shape of things, called forecasting.

While preparing business plans, management has to make some predication about future shape of things. The past experience and future events do have a bearing on the future possibilities. Forecasts are only well educated guesses or inferences as to what the future may be. Forecasting provides a logical basis for preparing plans. The actual performance of the past, the present situation and likely trends in the future are considered while preparing plans. Though, it is very difficult to predict about the uncertain future, but still an attempt is made to estimate the things in a systematic way. The forecasts should be regularly monifored and revised whatever is a change in situation. Business forecasting is an act of predicting the future economic conditions on the basis of past and present information. It refers to the technique of taking a prospective view of things likely to shape the turn of things in foreseeable future. As future is always uncertain, there is a need of organized system of forecasting in a business. Thus , scientific business forecasting involves:

• Analysis of the past economic conditions
• Analysis of the present economic conditions;