Financial forecasting involves estimating future financial outcomes based on historical data and market trends. Entrepreneurs can use:
- Trend Analysis: By examining historical financial data, entrepreneurs can identify trends and make informed predictions about future performance. - Scenario Analysis: This involves creating different financial scenarios (best-case, worst-case, and most likely) to anticipate potential outcomes and plan accordingly. - Budgeting: Creating detailed budgets helps entrepreneurs allocate resources effectively and set financial targets.