Get ready for 2021: 15 business leaders share forecasting strategies

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Get ready for 2021: 15 business leaders share forecasting strategies

Dominated by the global pandemic and the accompanying economic disruption, 2020 has been a challenging year for businesses across industries, and uncertainty is impacting planning for 2021. The unpredictable economy makes forecasting staffing and resource needs difficult for any business, especially when there’s also uncertainty surrounding clients’ needs and expectations.

The Business Journals

While resource planning may not be an exact science right now, you can still take steps to more accurately forecast your business’s needs for the next year. That’s why we asked 15 members of Business Journals Leadership Trust for their top business forecasting strategies for 2021. Here’s what they had to say.

1. Ensure the basics are covered if the unexpected happens.
Whether you add new members to your organization’s sales team or invest in more resources, those things all cost money. Each business must establish a budget at the beginning of the year and do their best to follow it. Accidents and/or surprises will happen, and occasionally they may drain more of your budget than anticipated. Have a predictable budget that accommodates your basic needs. – Wesleyne Greer, Transformed Sales

2. Keep in close touch with clients.
Over-communicate and ask more questions. If you are uncertain of your clients’ needs and expectations, ask them (often). Call them at least once a quarter if not monthly to check in. Leave a voicemail. They may not call you back, but they will know you care enough to call. – Matt Bratlien, Net-Tech

3. Plan for the best-, middle- and worst-case scenarios.
Having gone through multiple economic dips over the past 30-plus years, I’ve learned to run three options on forecasting: best-case, middle-case and worst-case. I typically base my forecasting on the middle level and identify other ways to address the best- and worst-case scenarios should either turn out to be the reality. – Scott White, BizCom Associates

4. Update your budget each month.
We will finalize our 2021 budget before the end of December 2020. We also update our budget each month throughout the year as the business climate and our strategy changes. Doing this in 2020 really made our year more predictable and stable during the pandemic. The cost of goods sold and expenses side became very predictable, and weekly sales meetings with projections helped us accurately project sales. – Matthew Palis, Infront Webworks

5. Audit your external data sources.
Proper forecasting helps businesses plan for future growth amidst the challenges in the current economy. Doing so now requires using the best data available. One strategy to improve forecasting is to ensure that all external data sources and assumptions are up to date. The pandemic has changed the outlook for industry growth, and it’s important to use market data that considers the pandemic. – Vincent Phamvan, Vyten Career Coaching

6. Ask customers questions early and update often.
If you are just now thinking about 2021 forecasting, you are late to the party. The best thing you can do to improve forecasting with customers is to begin asking questions early and often. The market is experiencing wild swings that directly affect resources and staffing. An accurate forecast today may be a swing-and-a-miss in just weeks. Start the dialogue now and update everyone often. – Paul Weber, EAG Advertising & Marketing

7. Plan for administration.
When forecasting, be realistic and plan for administration. We forecast 70% to 83% capacity at most when helping clients. We work to educate folks on planning 20% “reactive” capacity for the unplanned work that always comes up. Under-promise and over-deliver! Regarding Covid-19, we recommend continuing to use a smaller internal workforce with greater use of external workers — again, greater flex capacity. – Paul Herring, 101 Solutions LLC

8. Use data to project, then tweak based on intuition.
Previously we just flew blind, but we have implemented software that projects our monthly revenue based on history. On top of that, we’ve seen an upward trend since May, so we’re going to add 25% to our projections for 2021. This makes general sense for anyone. Use data to project your needs, then use your intuition to tweak it to reflect the strange times we are in. – Brian Walters, Walters Gilbreath, PLLC

9. Invest in business intelligence.
Business intelligence is all about harnessing the data that a company generates to gain valuable insights for interpreting and forecasting performance as well as for scenario-planning and future-proofing the business. These tools empower organizations to have flexibility in managing their resources with the kind of agility that enables their teams to engage more effectively and successfully manage changes in service delivery. – Joey Johnsen, Zeevo Group LLC

10. Study industry trends.
For us, an effective strategy for forecasting future business needs is focusing on trends related to our industry. Specifically, we focus on legal and regulatory trends that may affect our business or the business of our clients. We regularly review online search patterns related to drug and alcohol testing. The comparison of past and current trends aids in our forecasting. – Joe Reilly, National Drug Screening, Inc.

11. Account for both short-term unknowns and long-term client expectations.
There are two sides to this coin. On one hand, the needs your clients had prior to all this uncertainty are still there and likely even greater. On the other hand, there is a slew of unknowns that need to be accounted for in the short term. Factoring for both short-term and long-term expectations is a great strategy to employ in 2021 and beyond. – Rachel Namoff, Arapaho Asset Management

12. Be conservative when forecasting staffing needs.
Err on the conservative side with staffing because it’s easier to staff up than staff down. When hiring is needed, hire strategically and selectively to ensure your entire team works well together. Invest in your staff to make sure they have all the tools they need to operate at 100% efficiency. – Jessica Hawthorne-Castro, Hawthorne Advertising

13. Use BI to forecast demand.
Analytics is no longer enough; you need business intelligence. BI for us is a combination of the current demand level for our products and services and our expectation of how much of that demand we can capture in six, 12 and 24 months — and on. When we see an increase in demand for one area of our business it is typically a predictor for success in the months to follow. – Solomon Thimothy, OneIMS

14. Set a nonnegotiable baseline.
As an early-stage company, we know there are some nonnegotiable numbers we need to hit to continue to validate our business. We are following a 20/20/20 rule. We must grow revenue at 20%; we must have 20% earnings before interest, taxes, depreciation and amortization; and we must keep employee and client turnover to less than 20%. We can build from there, but we view that as our nonnegotiable baseline. – William Balderaz, Futurety

15. Consider whether certain historical data are still valuable.
Typically, forecasting uses historical data to estimate monthly, quarterly and seasonal needs and trends. With Covid-19 creating a wildcard disruption, it may be time to eliminate multi-year historical data depending on your business model’s reaction to these circumstances. It’s a new normal in many areas. Use a new baseline as your forecasting starting point. – Jeffrey Bartel, Hamptons Group, LLC

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