Effective Business Planning & Forecasting

As we approach the middle of the fourth quarter, many executives will begin turning their attention to next year and what that means for their business both strategically and budgetarily. When planning for the coming year, there are many considerations worth evaluating that will have a direct impact on your company’s success.

The most important factors that will impact your #forecasting and planning process are relative to understanding your market and reviewing of your company’s historical sales data. Without this information it is impossible to set attainable goals and make realistic projections on what your company plans to accomplish in the coming year.

Understanding Your Market

Your industry’s marketplace is constantly changing and having your finger on the pulse of these evolutions will better enable you to respond proactively to challenges and opportunities. By having a sound strategy based on #markettrends, you will be able to adapt to the demands of the customer and stay ahead of the curve.

This includes keeping an eye on niche opportunities that will present as fads or trends, as well as regulatory and legislative fluctuations that may have a direct or indirect impact on your industry.

Historical Data

Evaluating your company’s sales data will better enable to you to make realistic #projections for the coming year. By assessing your #salespipeline over the past three years, you will uncover behavior patterns, where your prospects get stuck or drop off your pipeline, closing ratios, and year-over-year customer retention.

Understanding these behavior trends will allow you to evaluate opportunities to improve sales processes and training, sunset products or programs that drain resources, and focus on strengths to meet or exceed revenue goals.

A large part of “doing the work” when it comes to setting expectations is delving into the current state. As businesses create, or re-affirm, their #strategicplans it is necessary to make sure the company is staying true to its purpose and delivering on its #valueproposition. Often times during a growth phase or unprecedent changes in the marketplace, such as the impact from COVID, companies will make swift decisions to bolster sales. And while these choices may produce short-term results, it is critical during the year-end evaluation to reaffirm your mission and vision so you delivering the #consumerexperience expected from your brand while also presenting your sales team with accurate and attainable goals.

When forecasting, there are a few key elements that will help make the process easier and allow for realistic projections in the following year:

• Short- and Long-Term Goals: Understand the difference between your business’s short-and long-term goals and set expectations that meet both. This includes reasonable goals, but also resources to support your team’s ability to achieve both.
• Cross Team #Collaboration: Forecasting and strategic planning cannot be done behind boardroom doors. It is critical to incorporate leaders from all teams in the discussion so that you have a full understanding of the challenges and opportunities your business is dealing with.
• Customer Feedback: Whenever possible, include your customers in the conversation to best understand how your product or services actually meets their needs. This can happen at various levels and be done throughout the year by monitoring and responding to online reviews to determine #customersatisfaction and pain-points, scheduling non-sales follow-up calls as part of your business’s onboarding and retention strategies, or sharing a brief customer survey to solicit feedback. One tool I typically recommend is #netpromoterscore (NPS), a customer satisfaction benchmark that measures how likely your customers are to recommend your business, customer loyalty, customer experience and is also a predictive of business growth. Based on customer answers, metrics, analytical reports and scoring are populated. NPS reflects how likely customers are to promote a brand and offering critical customer feedback that can be reviewed with internal teams to draft a plan of action.
• SWOT Analysis: Evaluate the strategic position of your business using the tested Strengths, Weakness, Opportunities, and Treats (#SWOT) Analysis to uncover internal and external factors that impact your company’s ability to meet your goals or objectives.

Once you’ve done the work to validate your company’s position, initiatives, challenges and opportunities, setting realistic goals and supporting your team to meet those goals will be a lot more manageable.

As you cycle through your Q4 planning meetings and develop your forecast, I would enjoy hearing what strategies you find most helpful to your business’s goals. Drop me a line or share a note in the comments and we can discuss.