Forecasting And Analytics

Written by Mike J Midgley | Nov 4, 2022 5:30:00 PM

Has Your Business Got A Bright Future?

I want to talk to you about forecasting and analytics.

It’s 2023, and the year end is almost upon us. It’s a bright day for November, but not every business has a clear, bright future.

Not because of its potential, but because many entrepreneurs, especially those running smaller businesses, they don’t have a proper handle on the key numbers.

Now, this isn’t another boring finance warning. It’s a quick reminder of just how essential it is to stay on top of your business’s financial health through accurate forecasting and solid analytics.

Which One Is Your Weakness?

Here’s the big question for you today:

Are you stronger at forecasting (predicting the future), or are you better at analyzing what’s already happened?

In most businesses, we end up looking back and saying,

"How did we do?"

The key difference, though, is whether you're actively working to predict the future or just analyze the past. If you’re running a business, especially with investors or funding in play, you’ll need to be forecasting as well as analyzing.

For those of you in industries with investments, you’re already forecasting allocations and specific line items.

If not, it’s time to start thinking ahead.

So, let’s look at five key areas of your business: finance, operations, people, marketing, and sales. I want you to assess where you are in both forecasting and analytics in each of these areas

Finance: Forecasting & Analytics

If you’re managing finance, you likely already forecast your budgets and cashflow ,by product, channel, or department.

You should be forecasting regularly: weekly, monthly, quarterly, biannually, and annually.

On the analytics side, keep track of your numbers frequently. Don’t wait for the month-end to do your analysis.

I’d recommend checking in every 10 days to monitor your numbers.

Some people say, "I have my finger on the pulse of my P&L daily." If you’re there, fantastic.

If not, try to get into the habit of looking at it regularly. The sooner you identify an issue, the quicker you can make corrective actions.

Operations: Forecasting & Analytics

When it comes to operations, forecasting is all about predicting your future production or service delivery needs.

What’s your sales team telling you?
What production levels will you need to hit to keep up with demand?

On the analytics side, once you’ve made those investments in people, systems, and equipment, you’ll need to analyze how well they’re performing.

Are people hitting their targets?
Is the machinery operating efficiently?
Is the increased production level paying off in terms of profitability?

People: Forecasting & Analytics

Forecasting people needs is straightforward: as your business grows, you’ll need more people.

But how do you forecast that?

Set up tripwires. For example, “If production hits X, then we’ll need Y number of customer service reps or Z additional developers.”

Once you have that forecast, the next step is performance analytics.

Are your people performing at the level needed to hit those numbers?
Are they achieving KPIs, or do you need to implement additional training or support?

Marketing: Forecasting & Analytics

Marketing is another area where forecasting and analytics are both crucial.

Start by forecasting the number of leads you need at the top of the funnel. How many marketing-qualified leads (MQLs) do you need to achieve your sales target?

On the analytics side, track how well those leads convert and whether your marketing efforts are aligned with your goals.

Did you hit your targets for MQLs?
Did you convert them into sales?

Sales: Forecasting & Analytics

Sales forecasting can be as simple as tracking quotas for your sales pipeline. But it’s more than just making sales calls.

Consider the following when forecasting:

How many calls, demos, quotes should each salesperson make?
How many follow-ups or meetings are necessary to meet your target?
On the analytics side, it’s all about tracking the sales pipeline from initial inquiry through to quote and close.
Are you hitting your targets, or is there a gap in conversion?

Use analytics to identify where you’re losing deals, so you can focus on fixing those issues.

Task Action Plan

So, here’s the action step for you today: score yourself out of 10 in these key areas of forecasting and analytics.

Finance: How strong are you at forecasting and analyzing your finances?
Operations: How well do you forecast operational needs, and how well do you monitor the systems you have in place?
People: Are you forecasting staffing needs, and how well are you analyzing employee performance?
Marketing: How accurately are you forecasting the number of leads you need, and how do you measure conversion?
Sales: How strong is your sales forecast, and how do you measure sales success?

Conclusion

Whether you’re strong on forecasting or analytics, or both - understanding your numbers is key to achieving long-term success.

The earlier you spot problems or opportunities, the faster you can act on them.

By implementing solid forecasting and regular analytics checks, you can ensure that your business is on track to meet its targets, and continue to grow.

If you’re not sure where to start, start with the basics, and build from there.

Keep an eye on both your projections and your performance, and you’ll stay ahead of the game.

Always here to help you start, grow, and thrive. Let me know how I can support your next big move.

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