5. Consider Clients’ Satisfaction
How does the market view a company’s offering? If satisfaction and brand perception is decreasing this will probably translate into top line pressure. Conversely, if the market is viewing the company’s offering more favourably, this strengthens the ability to plan around increasing forecasts and may even be translated into a vertical or horizontal move into markets with the same or similar needs sets; adding growth opportunities.
6. Ensure Low Hanging Fruit is Being Captured
First a company must understand its core competencies relative to key needs of the client and competitive offerings. This will point a company to focus on maximizing sales from current clients making an accurate forecast much easier to achieve. It is better the devil you know……
7. Is Distribution in Alignment with Forecast
How is a company going to market, how does that contrast with other industry leaders? What are the advantages and disadvantages from a top line perspective? Making the right choice for distribution can have a significant impact on predictability of sales and time to money. For example, if decision makers are known and there is an existing relationship then going direct may be the best course of action for predictable outcomes, conversely if it will take time to develop consideration and selection by decisions makers, an in-direct channel through distributors may be the best option. Either way, channel decisions will impact forecast.
8. Know What the Competition is Up To
Knowing the competition is key. What are their offerings, what are the terms, what market dynamics are at play, are all pieces of market analysis that will tell a lot about the health of the company’s forecast. For example, if the industry 800-pound industry guerrilla has recently launched, or plans to launch, a new product or has made changes to terms, how is it being received by industry stakeholders, what are the sales results and potential impacts on forecast.
Stress testing forecasts using industry and market data is an essential business function to improve predictability; if your company is not doing it, internally or through advisors, then it needs to figure out the best way to make that happen, as without it, your profit, cash flow, valuation and even the future of the company is at risk.
Steve Williams is a Principal at the Incentica Advisory Group in Calgary. Steve has done over 100 strategic plans for some of the biggest and best companies in Canada.