1. Some forecasting methods may use the same data but deliver widely different forecasts. For example, one forecasting method can show that interest rates will rise, while another will illustrate that rates will hold steady or decline.
2. All qualitative forecasts assume that certain market characteristics that existed in the past will exist in the future. Unfortunately, during each operating period, the market can be positively or negatively affected by unexpected occurrences, such as weather events, changes in tax code and changes in competitors’ products and services
3. In times of political and economic uncertainty, historical data may be obsolete, although current data may not be available. In such cases, in developing a forecast, a small business may rely on the opinions of company leaders, if the opinion of one person, whose view prevails, is incorrect, the forecast is incorrect.
4. The longer the forecasting period, the less accurate the forecast will be.
5. Sales people, who tend to be optimists, will likely develop a forecast that is overly optimistic.
6. Building a sales forecast of accuracy is very intensive with any level.