Forecasting And Analytics
Has Your Business Got A Bright Future?
In this Growth Engine Daily, I really want to talk about forecasting and analytics.
Here in the UK today, it’s just approaching the start of the summer.
Nice, bright sunny day, but not every business has got a bright future.
Not because of its potential, but mainly because people, especially the entrepreneurs running them, don’t have a handle on the key numbers.
Now, this is not another boring finance warning.
It’s a real quick one.
Which One Is Your Weakness?
What I want to ask you to think about, leave us a comment below, is you stronger at forecasting? Predicting the future.
Or are you stronger at analysing what’s already happened?
The traditional analytics accounts, we always prepare management accounts.
Then, we end up looking back and saying, “How did we do?”
That’s a typical one, but it’s a lot wider than that.
For the businesses, especially with you guys there with investment out there, you’re going to be forecasting in advance.
You’re going to budget allocations and specific line items.
What I want you to do for today is have a look at each key five areas of your business, and try to assess what you’re doing from a forecasting perspective and what you’re doing from an analytics perspective.
To give you a couple of quick tips, Finance Forecasting & Analytics:
if you’re sat there in finance, then, naturally, you can forecast your budgets either by product or by channel or depot or international or the UK or whatever that might be.
You could forecast, “What do we think we’ve got to do?”
That could be weekly, monthly, quarterly, biannually, annually
Then, the analytical side of that is keeping on top of those.
Don’t get a month end and wait.
Every 10 days, we work for decades here, every 10 days, you should be looking at it.
Some people say, “Hey Mike. I’ve got my handle on my P&L daily.”
If you’re at that level, fantastic.
If you’re not, have a look at it, see where you’re at, keep on track of it and then make corrective actions.
Operations Forecasting & Analytics:
If you move forward into operations;
- It might be systems
- It might be customer service
- It might be manufacturing.
How Much Production Do You Need?
What are you forecasting?
What is your sales line saying to say how much production you need to do?
Or what are your systems, your recruitment?
How many people will we need if our production goes to a certain level?
Then, monetise that and once that’s invested, then you can start to look at analysing that through;
- How are people doing?
- How is the machinery doing?
- How is the investment that we make to get that increased production?
People Forecasting & Analytics:
The people side is dead straightforward.
Again, I like to put tripwires in forecasts to say, “If we reach this level of production or service delivery demand, then I’m going to need to recruit these two customer service reps or this accountant or this account manager,” or whatever it would be.
Then, I think it’s a session on its own. It is looking at people and monitoring their performance and getting the best out of them by having the right culture.
Again dead straightforward, forecasting the type of leads that we’re going to need at the top of the funnel all the way down through to conversion.
Then, looking at that against your sales forecast.
How did we do?
What did we convert?
Did we get enough marketing qualified leads [MQLs]?
Sales Forecasting & Analytics:
Sales, again, might just be quotas for your sales pipeline.
- How many calls do my people need to make?
- How many account management calls do they need to take?
- How many cross-sells?
- How many visits / appointments?
- How many seminars to attend?
- How many networking meetings should my team be doing to reach a quota?
- How much social listening should they do?
Then, again, monitoring that through a pipeline from initial inquiry through to marketing qualified, sales qualified leads [SQL]through to quotes that you’re giving and closers.
When you look at those areas, in all parts of your business, you’ve got the forecasting element and you’ve got the analytics element.
Task Action Plan:
What I’d like you to do is just leave me a comment below, let me know, score yourself out of 10, five, three, whatever you want to do.
Just let me know;
- Are you stronger at analytics after the event?
- Are you stronger at forecasting?
- Are you just getting started?
If so, what’s your biggest single question you’ve got about forecasting and analytics, so you could start to move forward and start getting a firm grip of your numbers?