14 Types of Business Assumption

Business assumptions are things that you assume to be true for the purposes of developing a strategy, making decisions and planning. They are commonly documented in business plans and business cases as a disclosure of uncertainty and risk. Business occurs in an uncertain environment and assumptions always need to be made to move forward with a strategy. The process of documenting assumptions can have value in identifying risks. In some cases, brainstorming assumptions leads to new ideas and improvements in strategy. The following are common types of business assumption.

Financial

Basic financial assumptions such as access to capital.

Resources

The assumption that key talent will be available and engaged.

Schedules

Dates that need to be met for your strategy to succeed. For example, an assumption that you will be able to design a new product within 3 months.

Customer

Assumptions about customer needs, perceptions and other factors such as purchasing behavior. This can be included as an assumption even if you have run tests and have strong data.

Competition

How competitors or market conditions could disrupt your plans. For example, an assumption that market prices will remain relatively stable. Assumptions are typically required to be both realistic and conservative. For example, if prices are regularly falling by 3% a year, an assumption of 4% or 5% might be appropriate.

Technology

Technology assumptions such as the feasibility of a technology or its success in the market.

Marketing

Marketing assumptions such as the ability to attract channel partners.

Know-how

The assumption that you will be able to develop new business capabilities and know-how as an organization. For example, the assumption that you can learn to manufacture something when you're never manufactured anything in the past.

Facilities & Infrastructure

The assumption that you will be able to procure facilities such as office space and infrastructure such as an adequate power supply from a grid.

Procurement

The ability to find required supply partners and procure required machines, devices, supplies, parts and materials in a timely and cost effective manner.

Economic & Political

Assuming a stable economy and political environment.

Interest Rates & Exchange Rates

If you perform any calculations using assumed interest rates and exchange rates, state the assumed rate.

Compliance & Regulatory

Assumptions about laws, regulations, standards and related administrative processes. For example, the assumption that you will have a required license approved.

Legal

Legal assumptions such as the anticipated outcome of a legal process.

Overview: Business Assumptions
Type	Business Plans
Definition (1)	Things that you assume to be true for the purposes of developing a strategy, making decisions and planning.
Definition (2)	The process of managing uncertainty by choosing reasonable assumptions as a basis for strategy, decision making and planning.
Related Concepts	Business Plans » Business Cases » Uncertainty » Risk » Customer » Customer Needs »