Business Forcasting, More Art Than Science

Business forecasting is not a pure science. It is more likely to be a matter of common sense, patience, research, and educated guessing than statistical analysis or higher mathematics.
Consider the weather forecast: it’s one of the best forecasts available anywhere.
Meteorologists study wind patterns, satellite pictures, air pressure, and years of past trends. Each forecast is based on careful analysis of what’s going on, why it’s going on, and why it might lead to something else tomorrow. If a storm is over the ocean and is headed toward the coast, then the probability of rain or sunshine is a professional guess, based on a wealth of knowledge, some good judgment, and common sense. Computers, satellites, and other tools increase the store of knowledge, but they can’t do it all alone.
The same general idea applies to many other good forecasts. Market researchers, stock brokers, and even political analysts base their guesses on huge volumes of carefully analyzed information. They might use computerized econometric or simulation models or
complicated trends analysis. But even the most sophisticated computerized forecasting models do little more than pull equations out of the past and spread them into the future. This is a good way of considering alternatives and a valuable check on the thinking process. But there is still no substitute for consideration of trends and alternatives: the famous “what if” we hear so much about.
There are no magic forecasting methods that always work, let alone a computer program that will forecast by itself. The heart of forecasting is good guessing and the best guess is an educated guess. So use common sense, judgment and as much information as
possible. Look at as many angles as you can and consider past trends, new developments, anticipated cycles, and anything else that gives you a hint of what is to come.