Forecasting to Survive and Thrive in Uncertain Times

In the aftermath of COVID-19, 3 things most businesses are desperately trying to evaluate are:

    • what their sales will look like in the coming weeks and months?
    • how much cash will be available in the business?
    • How long will they be able to stretch that cash?


Also, business owners and management teams are wondering how to take advantage of this adversity to increase their business.

In order to survive and take advantage of this unprecedented ordeal, perhaps the most important discipline businesses need to develop NOW is accurately forecasting their future SALES and CASHFLOW position. The expression CASH IS KING has never been more pertinent.

In this blog we will look at why accurately predicting your future sales and cashflow has suddenly become so important and things to consider when designing your Financial Forecasting Toolkit.

Why Accurate Forecasting Has Become So Important


The reality is nobody knows what the full impact of COVID-19 will be and how prolonged the effects will be. Hence as businesses navigate through this period of uncertainty, they will need

    1. To stay informed on their future expected cashflow and whether they have a going concern risk.
    2. To have a sound financial basis for making restructuring and cost cutting decisions.
    3. To have an ability to gather up to date market intelligence on risks or any lurking market opportunities and incorporate this in their financial forecast.
    4. To have in place necessary financial information for bank funding purposes.


What To Consider In Your Financial Forecast Toolkit?


Step 1 – Commit to a Good Process


One of Dwight Eisenhower’s quotes was “Plans are useless, but planning is indispensable”

On the same token perhaps the most important aspect of forecasting lies in the planning process which includes having the right internal conversations, intelligence gathering, and management team coming together to formulate assumptions and develop and test plans.

Intelligence gathering starts with understanding whether and how the sector and channel demands are “dislocating” as well as getting intimate with key customers to understand their changing requirement in order to serve them better and retain their business. It is also important to assess how your competition is positioning itself and the impact of any constraints created by COVID-19.

Most businesses also have a wealth of information hidden away in their Accounting System such as customer sales history, profitability by customer or product etc. If you haven’t already, now is the time to look at how to access this data to enable you to glean insights which may help you improve sales and profit.

Information from the intelligence gathering exercise should help you formulate your future demand plan for the financial forecast.

Step 2 – Develop a Simple Set of Forecasting and Reporting Tools


Keep it Simple – developing a Forecasting and Reporting tool, generally as a spreadsheet based model, is a balance between being able to capture the right level of detail versus making it easy to use on a daily/weekly basis.

The model should enable you to test multiple scenarios/ sensitivity analysis based on different assumptions (best case /worst case) and help you answer questions such as “what will happen to my profit if USD exchange rate goes from 0.60 to 0.55?

Forecast templates can be a 1-Way (only cashflow forecast), 2-Way (Cashflow and P&L) or a 3-Way (Cashflow, P&L and Balance Sheet) depending on the requirement.

Most importantly the reporting should be able to provide visibility into short term cash management and liquidity and enable you to proactively manage net working capital, discretionary spending and short-term profit improvement.

The report should also highlight to you whether any cost cutting or restructuring initiatives might be necessary to ensure the business continues to survive.



Did you know that the government through NZTE and Regional Business Partner Network has created a special Covid-19 Business Advisory Funding to support businesses through this crisis?  

At Paradigm5 Partners, we also provide COVID-19 Business Support including:

  • Financial Forecasting
  • Business Restructuring
  • KPI Reporting 
  • Bank Funding Support

We are a registered service provider with Regional Business Partner Network and qualifying entities will be able to use their Covid-19 Business Advisory Funding for our services.

To find out about the free subsidy from Regional Business Partner Network see the link below.

Alternatively contact us or email and we will be happy to guide you on how to apply for the subsidy.

The Covid-19 Business Advisory Funding can be used to obtain support in areas such as HR, health and well-being, business continuity, cashflow and finance management, strategy and digital capability.