Some assumptions are as easy as assuming the sun will rise in the morning and others are as complex as predicting the economic outlook for the next ten years. If it is so difficult to make accurate assumptions, why even bother? Because assumptions are necessary for a good plan, and better assumptions make a better plan.
You have to make assumptions of future trends in order to prepare for those trends now. Because the marketplace changes so rapidly, some companies choose not to make any assumptions and maintain the status quo, each year refreshing the same game plan over and over without making any significant changes. This doesn’t solve their problems and leaves them exposed for a number of negative possibilities.
Assumptions built on experience, awareness and research are the guide for actions and strategic initiatives. For example, if access to capital is becoming quite restrictive, how will that impact your growth and expansion plans over the next 18 months? How should you shift your actions today to prepare for those assumptions becoming a reality?
Wishful thinking is different from assumptions. A CEO can be so excited about the new store he is building that he is convinced everyone in the area will stop shopping at their familiar stores and only shop at his beautiful new store. When confronted with the response by the competition who are vigorously working harder to retain their customers, only then does he realize he was thinking more along the lines of wishful thinking that a proper assumption of the situation.
Drill down into the details when making assumptions. Proper assumptions are based on solid facts. The deeper you get into the details, your instinct and historical information will form a clearer assumption of future activities.
