Rain, hail or sunshine?

In the last week or so a few clients shared that they were re-checking their sales forecasts so they can make important decisions. Reliable forecasts mean a business can make better decisions about things like staffing, resources, stock, production, capacity and cash-flow. Accuracy can be the difference between tough but measured actions now, or more dramatic changes later.  A low but reliable forecast is better than a false “hopeful” forecast.

One day I might write a book on sales forecasting, but in the meantime here are a few recommendations to help you forecast more confidently right now:

• Build the forecast from the bottom up, not the top down, especially now. Start from zero, not from your pre-COVID numbers. An active decision to put a deal in the forecast is better validation than agreeing to keep one in.
• Insist on ruthless curiosity (but no judgement) to understand each deal as best you can.  Anticipate changes and challenge assumptions.
• Dive into the detail of the largest & most important potential deals. Be clear and honest about gaps, challenges and doubts.
• Sketch out time-lines to test the decision date. Map out the stages, milestones, durations, lead times and elements of the buying process.
• Avoid discussing what you should do next. Forecasting should be about analysis and agreement to forecast or not. Save action planning for a separate session.
• Facts matter more than factoids & fiction. Listen for words & phrases like “I think, perhaps, probably, maybe, my opinion, their impression is.” When you hear them, get curious and look for facts to back them up.

Bottom line is to think more like the TV news forecaster than a party host (remember parties!?). The weather forecaster doesn’t report the weather they need, they dispassionately predict the most likely outcome based on data and modelling. They start with no assumptions and don’t adjust the forecast based on what they think we want to hear.

Once you have agreed on your forecast, then and only then should you decide what you can do to improve it. Don’t mix up the two processes.

It’s better to admit when the data says there’s a storm coming so you can plan for it, than it is to hope for sunshine and end up exposed. If you have any suggestions for the book title, let me know.