This phase is the stumbling block for many small business owners. Their first response is “I don’t have a crystal ball and I’m not an economist!” Who could argue with them…but I don’t let them opt out on those excuses. Of course, nobody can predict the future (though many make a living convincing others they can!). However, one can examine the past and look at current conditions to establish a ‘feasible range of occurrence’. After all, one has to start somewhere in the planning process. As we gather more information, we can adjust those ranges and the ‘confidence %’.
The whole point of this process is not to suggest that we are prophets but to define scenarios and how we might achieve them and deal with them – operationally as well as in terms of marketing and sales. If there is anything I want to get across in all the blogs I will write, it is that owners and managers must be ‘open to discovery’ and the way to that discovery is to identify realistic potential scenarios, think about them, strategize about them (i.e. develop alternative paths and actions) and then MAKE A CHOICE and run with it until you determine it needs some adjusting. Staying status quo should be a CHOICE…not a default for inaction, indecision or sheer terror!
I hope you’ll visit me next week to pick up on this process of forecasting. You’ll see the ways that some use which lead to fallacious insights and poor planning… but are often used because they seem logical.
These ‘doses of insight’ are best presented in small quantities so you have time to work with them and see how they fit for your company. I welcome your feedback…good bad or ugly! Thanks for taking the time with me.
HOMEWORK: Gather your past 3-5 years sales information (by customer and product if available). Take a look at your current new account develop activity and statistics. Have them handy for the next blog. You’ll be glad you did because you’ll learn the ways NOT to develop a sales forecast (common errors) and some tips for getting it to make sense!
As always, feel free to contact me at Stan@fambizdoc.com and be sure to go back to read my earlier blogs. You may also want to read my new book, Set Yourself Free – How to Have a Thriving Small Business… And Enjoy It.