Top 10 Ways Small Business Owners Can Forecast the Future

Forecasting the future isn’t about having a crystal ball—it’s about thoughtful planning, data-driven decisions, and the courage to adapt. For small business owners, knowing what’s coming next means better cash flow, smarter hiring, and fewer sleepless nights. Whether you’re running a local bakery or a B2B tech startup, these ten forecasting strategies can help you navigate uncertainty and seize new opportunities.

1. Historical Growth Forecasting

Start with what you know. Analyze your past sales and revenue trends to predict future growth. If your business has grown steadily over the past few years, calculate the average monthly or annual growth rate and project it forward. For instance, if your revenue has increased by 8% each year, use that figure as your baseline for next year’s forecast. QuickBooks makes this easy—its customizable reports let you track sales over any period, allowing you to spot patterns and outliers quickly.

Actionable tip: Run a Profit & Loss report in QuickBooks for the last two years. Identify your average monthly growth and use it as a starting point for next year’s budget.

2. Linear Forecasting

Sometimes, growth isn’t percentage-based—it’s a steady dollar increase. Fit a trend line through your revenue data to see how much your income grows each month. This is especially handy for businesses with regular, incremental improvements, such as a subscription box service that adds new customers each month.

Practical example: If your revenue grows by $2,000 every month, project that same increase forward for the next six months.

3. Moving Average Forecasting

Business can be noisy. Smooth out short-term fluctuations by averaging your sales over several periods. This helps you avoid overreacting to one-off events or seasonal spikes. QuickBooks lets you export sales data to Excel, where you can calculate moving averages in minutes.

Actionable tip: Use a 3-month moving average to forecast next quarter’s sales. If you see a sudden drop or spike, investigate before adjusting your forecast.

4. Pipeline-Based Forecasting

If you manage deals in stages—like in a CRM or QuickBooks’ customer tracking—assign probabilities to each deal based on its likelihood of closing. Multiply the deal amount by its probability to estimate future revenue. This is critical for service businesses or B2B firms with a sales pipeline.

Example: You have three deals:
– $10,000 at 30% probability
– $20,000 at 70% probability
– $5,000 at 90% probability
Your weighted forecast is $3,000 + $14,000 + $4,500 = $21,500.

5. Volume-Based Forecasting

For high-volume, short-cycle businesses, forecast using new leads, close rates, and average deal size. QuickBooks can help you track sales orders and customer inquiries, making it easier to estimate future revenue.

Practical example: If you get 100 leads per month, close 20%, and your average sale is $500, expect $10,000 monthly revenue.

6. Sales Cycle Forecasting

Calculate your sales velocity—how quickly deals move through your pipeline—and project future earnings.
Formula:
[(Opportunities × Win Rate × Average Deal Size) / Sales Cycle Length]

Example:
40 opportunities × 25% win rate × $2,000 average deal size ÷ 30-day cycle = $666 daily revenue. Multiply by 30 for a monthly forecast.

7. Budgeting and Financial Planning

Create a short-term budget for operational agility and a long-term financial plan for strategic growth. QuickBooks enables you to establish budgets for various departments and compare actual results to your targets. Adjust your spending or hiring based on how closely you’re tracking to your budget.

Actionable tip: Use QuickBooks’ budgeting tool to set monthly limits and track results. Review quarterly and adjust as needed.

8. Scenario Planning

Markets shift. Be ready. Model different “what if” scenarios based on potential changes—new competitors, price changes, supplier delays, or economic downturns. Fractional CFOs excel at this: they can build scenario models in QuickBooks or Excel, helping you visualize best- and worst-case outcomes.

Practical example: What happens if sales drop 20% next quarter? How would a supplier price increase affect your margins? Map it out, so you’re prepared.

9. Market Trend Analysis

Don’t just look inward—track broader market trends, customer behavior, and economic signals. Use data from industry reports, Google Trends, or customer surveys. Fractional CFOs can help you interpret this data and apply it to your forecasts.

Actionable tip: Subscribe to industry newsletters and compare your performance to market averages. If you’re lagging, investigate why.

10. Expert Guidance: Fractional CFO

A fractional CFO is a part-time financial expert who brings forecasting expertise and strategic insight to your business—without the cost of a full-time executive. They can help you build and refine your forecasting models, interpret QuickBooks data, and advise on cash flow, growth strategy, and risk management.

Practical example: A fractional CFO can create custom dashboards in QuickBooks, model multiple scenarios, and translate complex financials into clear action steps for your team.

Conclusion: Make Forecasting Your Superpower

The future favors the prepared. By using these ten forecasting strategies, small business owners can turn uncertainty into opportunity. Start with the basics—your historical data and pipeline. Layer in market insights, scenario planning, and expert advice for a robust forecasting process. Embrace tools like QuickBooks and consider partnering with a fractional CFO to gain deeper insights and confidence in your numbers.

Forecasting isn’t just about numbers—it’s about building resilience, making informed decisions, and positioning your business to thrive no matter what tomorrow brings. Take these steps now, and your small business will be ready for anything.

Ready to Take Control of Your Business Finances?

Don’t let outdated beliefs or lack of oversight put your business at risk. By combining smart technology, sound legal structure, and expert financial guidance, you’ll build a compliance watchdog that protects your company and your peace of mind. The right support means every expense is accounted for—no matter who’s making the purchase—and nothing ever “slips through.”

By investing in professional financial guidance, you’re not just preparing for a sale. You’re creating peace of mind, stability, and options for yourself and those who matter most.

Don’t wait for “someday.” Start building your sellable business today.