Forecast and Goals
The disposition of most entrepreneurs is to avoid being pinned down to a time and date by which certain things are to be accomplished. This characteristic goes hand in hand with an inner knowledge that the environment, and luck, have much to do with reaching goals. Then there is the concern that by not reaching a certain position at a stated time, the entrepre¬neur loses credibility. Nevertheless, the planning process requires a forecast be set out to which some portion of the venture's limited resources can be assigned. This compliance with a strategic management approach is critical to entrepreneurial success. Bergh and Lepnurn in a study of healthy versus sick businesses found there were real differences in setting ob¬jectives, formulating strategy and market planning as well as significant differences in financial planning and human resource planning. They found that successful ventures make plans, set goals and objectives while unhealthy firms, (those experiencing decreases in sales, profits and cash flow) do not.7
A forecast is developed through research and market analysis. An efficient method for estimating retail potential, which leads to a forecast, is exemplified in using a sales con¬version index (SCI). The annual publication of the "Survey of Buying Power" in Sales and Marketing Management magazine provides an easy method to analyze market opportunities and produce a forecast. The data provides an estimate of the total potential retail sales in a geographical area based on the development of a sales conversion index.8 Table 13.3 indi¬cates a typical display using this methodology.