Jasz
VIP Contributor
Forecasting demand is a process that businesses use to predict what the market will do in the future. It's an important part of any business plan because it allows you to make decisions about where to sell your product and how much inventory to keep on hand.
1 Identify Key Factors
The first step in forecasting market demand is identifying all of the factors that affect your business. These include:
Consumer spending habits - How much money consumers have to spend, when they are likely to spend it and what they are likely to buy with it.
Competition - What other companies are offering and how well they are doing.
Economic factors - How strong or weak the economy is and whether it's growing or shrinking.
Technological advances - New technologies that can change consumer behavior and make them want different products or services than they did before.
2. Estimate Demand for Each Factor
After you've identified all of these factors, estimate how each one will affect demand for your products or services over time. For example, if you're selling electronics during a recession, demand will decline because consumers will be less willing or able to spend money on new gadgets when they're worried about losing their jobs or having their hours cut back at work.
1 Identify Key Factors
The first step in forecasting market demand is identifying all of the factors that affect your business. These include:
Consumer spending habits - How much money consumers have to spend, when they are likely to spend it and what they are likely to buy with it.
Competition - What other companies are offering and how well they are doing.
Economic factors - How strong or weak the economy is and whether it's growing or shrinking.
Technological advances - New technologies that can change consumer behavior and make them want different products or services than they did before.
2. Estimate Demand for Each Factor
After you've identified all of these factors, estimate how each one will affect demand for your products or services over time. For example, if you're selling electronics during a recession, demand will decline because consumers will be less willing or able to spend money on new gadgets when they're worried about losing their jobs or having their hours cut back at work.
