You’ve got a new product. How much of it will you sell next year? The guys preparing the slide decks for VC pitches will show astronomical growth. The person asking for budget to produce the product may hear low-ball estimates from the stingy CFO. Somewhere in between is going to be the truth, and it’s worth knowing for production planning and cash flow forecasting.
“Nobody can forecast” is an expression that I hear a lot, but we all do it. Sometimes the forecast is with an econometric model and other times it’s just a wild-ass guess. But if you are in business, you forecast.
The challenge came to mind as my friend, cannabis expert Beau Whitney, wrote up his experience helping with the State of Oregon’s marijuana tax revenue forecast. Whether your product is legal or illegal, a major innovation or a minor improvement, the issues are the same.
Click to read the entire post on Forbes.