Spreadsheets allow assumptions about the environment to be variables in a formula used in forecasts. So for example:
Sales could be based on the formula:
Sales = total sales in market X market share
So an assumption can be made regarding market share based on the current competitors. Say 5 percent, if a new competitor enters the market the assumption could be adapted to 3 percent. All the other figures in the forecast will reflect this change.
This also allows for “what if” analysis where you can imagine a possible scenario, say a new competitor.
I hope this helps.
Lew
Developer of Business Plan Quick Builder and BizzLink
