Some firms develop a three-scenario forecast-a pessimistic, an optimistic and a “most likely” scenario-usually justifying the latter projection as something in between. In fact, this forecast should be as accurate a reflection of the entrepreneur’s research findings as can be determined.
Cravens points out that “one of the most important requirements in preparing forecasts is to specify-exactly what is being forecasted [defined product-markets], the time period involved, and the geographic area.”