PLANNING AND FORECASTING: FINDINGS FROM SMALL AND MEDIUM SIZED ENTERPRISES

Arturo Rodriguez
Eugenie Goodwin
Melissa V. Melancon
University of Louisiana at Monroe
ABSTRACT
Public companies, such as those in the S&P 500 index, are required to provide estimates of future growth and performance and are able to effectively forecast revenues using quantitative forecasting techniques such as moving average, regression, and exponential smoothing. The managers of these public firms understand that some consequences of failing to plan for future expectations can result in inadequate inventory levels and resources which can lead to increases in fixed costs, a loss of market share, and lower levels of profitability. Like public firms, small businesses should also focus energies on forecasting to achieve improved performance. A survey of small and medium sized enterprises in the U.S. was designed and deployed to question owners on forecasting, forecasting methods, accuracy of methods used, and likelihood of future use. The findings cast doubts on the small business owners understanding of, use, and appreciation for sales forecasts.