Your business was likely impacted by the coronavirus pandemic in 2020. You spent months operating through uncertain times and pivoting in response to external events. Now that 2020 has come to an end, your new challenge is to plan your sales forecasts throughout 2021. However, predicting what may happen this year based on what happened in 2020 is difficult. As circumstances continue to change due to Covid-19, it is necessary to use data and metrics for forecasting while maintaining flexibility for the evolving environment.
Here are my 3 tips to more accurately forecast your sales for 2021.
- Focus on the fundamentals
- Focus on leading indicators
- Target you best future customers
Let’s break it down…
First, focus on the fundamentals. Begin your forecasting efforts by focusing on the fundamentals. For instance, consider whether your niche within the broader staffing industry is growing, remaining steady, shrinking, or becoming obsolete. Depending on your answer, you may need to reinvent your business. Also, determine who your key targets and customers are, have they changed? Figure out the likelihood of increasing or decreasing their spending on your staffing services. Include whether they are likely to increase spending on other services you could offer; talk to your customers. Think about whether your resource plan maps to your sales/revenue plan.
Next focus on leading indicators. Forecast your sales numbers based on key performance indicators (KPIs). As leading indicators, these metrics show where you should finish in the future. Resist the urge to look at lagging indicators, the metrics for sales that already happened. These indicators do not provide insight into future performance because they cannot be changed. You need to focus on numbers that can adapt to the markets to more accurately predict sales.
Finally, target your best future customers. Focus your sales and marketing efforts on the companies you believe will be your best future customers. This may include customers you have had long-term or a new group of customers. Think about whether your targets are in mature or growth markets. Determine whether they are using all of your staffing services or could benefit even more from cross-selling. Consider whether you have changed your value proposition messaging to align with these objectives. Be sure to run a credit analysis and risk assessment on all of your customers.
Using the data and metrics while remaining flexible for whatever is to come in 2021 is the best strategy for tackling your sales forecasting goals. Let’s all put 2020 in the rearview mirror and focus on a successful 2021 however that may look for you!