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Case Studies

Case Study 4 – Forecasting

Family Businesses tend to fall into one of three categories when it comes to budgeting and forecasting in their business.

  1. They don’t do it at all.
  2. They do it – but without much science.
  3. They do it, implement it, monitor it and learn from the experience.

Dean has worked with one particular client for a number of years in setting their annual budget.

And, as is common amongst the clients that Dean works with on these projects, by about the third year, we’ve pretty much locked down all expenses. Most of the unknowns have become knowns. And any deviation between budget and actual is explainable in more than 90% of situations.

Which allows us to concentrate on the top line – the revenues that are required to generate the profit result that is desired.

This particular business provides a product and a service in their business. The products and services are inter related. This means we are able to look at actual measures such as number of appointments, rates of conversion and average dollar value of each sale when setting revenue targets.

With actual data, we are able to hypothesise as to the future of the business.

We spend time looking at each of the variables and forecasting what their impact is on the business.

And with that, we are able to consider alternative strategies for building revenues. Our sessions together allow us to deliberate on the pros and cons of those various strategies.

We can focus on marketing objectives that will drive enquiry – which, in turn, will drive sales.

We can focus on sales techniques that deliver returns to the business that are commensurate with the desired profit targets.

And we can focus on the relative sales performance of different members of staff and consider the many and varied means of success, or lack thereof, in determining the longer term suitability of those staff in meeting the objectives of the business.

Forecasting is not simply numbers on a spreadsheet. Forecasting is about affording yourself the opportunity to think differently about your business, set targets and implement monitoring mechanisms to ensure accountability and success.