In this article
Imagine this – an invented business, not a real one.
In Cape Town, the owner of a small events-hire company plans her December the way she always has: by looking at last December. Marquees, chairs, tables, a generator on standby for load-shedding. Then the calendar does something odd. The lights stay on, so nobody books the generator. Corporate year-end functions shrink to drinks in the office. Weddings that used to land in December drift into February and March. Her stock is in the wrong place at the wrong time, and her casual staff are booked for days that turn quiet.
Last December was a map. This year, the road moved.
When last year stops being a guide
2025 rearranged patterns many South African owners had learnt by heart. In Business Partners' SME Confidence Index for the fourth quarter, 73.4% of SMEs said reduced load-shedding had improved their operations. The festive season was less dependable: 46.5% said seasonal trading had no significant impact on their performance, and a further 8.1% said the impact was negative.1
And the worries ahead are mostly outside an owner's control. Asked by Xero which challenges they expected to affect their business most over the next 12 months, small businesses most often named political or economic instability (39%), followed by increasing tax rates (28%), service-delivery problems such as load-shedding and water supply (27%) and rising prices (27%).2
You can't forecast a policy announcement or a burst pipe. You can forecast how your business behaves when they happen.
A forecast is a rehearsal
The point of forecasting isn't to be right. It's to have thought through the likely futures before they arrive, so you're deciding instead of reacting. Owners sense this: 38% of small businesses in Xero's 2025 survey think AI will be most valuable in helping them manage cash flow and produce financial forecasts.2 And in Xero's 2024 survey, financial forecasting was one of the areas where small businesses felt most supported by their accountant, at 87%.3
Tools and advisers help. But the best forecast in a small business is the one the owner understands well enough to argue with.
That's why simple beats clever. A forecast that lives only in your head can't be checked; one that lives in an elaborate model nobody else can open won't be updated. Aim for something in between: a single sheet with your assumptions written in plain words next to the numbers – “corporate bookings down a third”, “no generator hire in summer” – so anyone in the business can see what you believed, and when it changed.
A rolling forecast in four moves
Keep it to one sheet or one screen, covering the next 12 months month by month. The rand figures are illustrative.
Start with what you know
Rent, salaries, loan repayments, insurance, SARS dates: your fixed commitments are the skeleton. Put them in first. They rarely surprise you, and they set the floor every month has to clear.
Add your patterns
Pull two or three years of monthly sales from your accounting system (Xero, Sage, QuickBooks) or your sales spreadsheet and look for the shape: school holidays, month-end paydays, the December peak, the January dip. Then ask what has changed – fewer hours of load-shedding, say, or a new competitor down the road.
Build three versions
Expected · Slow (−15%) · Busy (+10%)
Illustrative exampleR340 000 – R440 000
If you expect R400 000 in sales in a month, the slow case is R340 000 and the busy case R440 000. Now ask: in the slow case, which costs do we trim first? In the busy case, where do the extra staff and stock come from?
Roll it every month
When a month ends, replace the forecast with the actuals, add a new month at the far end and write one line on why reality differed. After six months, those lines are some of the most valuable data you own.
The best forecast is the one you understand well enough to argue with.
Plan for the road, not the map
Forecasting won't stop the next surprise. It shortens the distance between noticing and acting. For a small business, that can be the difference between a tough month and a lost season.
Back in Cape Town, our imaginary events-hire owner now keeps three versions of next summer on one screen. When corporate bookings thin out again, she won't need to guess. She'll already know which plan she's on.