18th December 2018
Time flies, especially in business. As you hustle, harry and plan to make your business thrive, the days and weeks can slip by so quickly. Case in point: it’s nearly 2019 if you can believe it and Christmas is upon us.
But time moving quickly shouldn’t mean just going with the flow. Time flies, indeed, but it's up to you to be the navigator. As 2018 hurtles to a close, now's the time for reflection and planning ahead. Or what’s commonly called the end of year review.
As you look for your defining edge, it's worth considering what lessons can be learned from the year nearly passed. All of that data you’ve created, both financial and non-financial, is valuable. Not just as a retrospective -- but as a lens into the future.
Here’s where forecasting becomes a valuable asset. Well, you probably are already forecasting in one way or another, whether it’s a spreadsheet or just in your head. You’ve set up targets and you’ve got a trajectory in mind for your business.
So it’s not necessarily about setting up a forecast, it’s more about effectivity. Done correctly, determine how to allocate their budgets or plan for anticipated expenses for an upcoming period of time.
A year of living dangerously
But can forecasting really hold pace with 2019, a year that already looks set to be a difficult one? Actually, if anything, this will make forecasting more essential than ever.
You need to plan, using the best information available to you at the time -- but you will also need to inject flexibility into your outlook. Hold the course, but also be prepared to shift, dramatically, if needed.
Forecasting isn’t setting a plan in stone, and it’s a process. Forecast quarterly, or even monthly, and then compare the forecasts to your actual results. Comparing your actual results to your forecasts on a monthly -- or even weekly -- basis offers multiple chances to make corrections.
A new generation of forecasting tools have this adaptability built-in. Data is pulled in automatically from your accounting software and populates a dashboard with your financial (and even non-financial data).
The dashboard offers a simple, visual way to track current and recent historical financial performance. And it’s flexible: It’s possible to create numerous forecasts as roadblocks pop up and new opportunities emerge.
You can create a base forecast, for instance, and then create different forecasts for best or worst case that you can simply link back to the base forecast in one click. In 2019, in a year which is due to be relatively unpredictable, a base forecast will be particularly nifty and it’s a usability that spreadsheets often lack.
Business intelligence made easy
The phrase business intelligence (BI) has traditionally been the preserve of larger, enterprise level businesses. Likewise, business intelligence softwares have been targeted at these customers.
But times have changed. SMEs now have access to powerful, forward looking tools that are also quite simple to use. You know your business better than anyone, and you’re swimming in ideas and possibilities.
The trick now is to make those ideas tangible, shareable and something real. A forecasting dashboard can do this for you, making it easier to interact and mould your ambitions for your business.
Things to do in 2019
- Commit to doing a budget review and forecast -- even if it seems hard to find certainty in the year ahead. Your obligations aren’t going away, no matter what happens in a negotiating room in Brussels.
- Stay flexible. In other words, prepare for change, sometimes at a moment’s notice. Nothing is set in stone. Do your best with what you have at the time, and then keep a close eye on what’s happening, especially with your customers.
- Talk to your advisers and staff. As a leader, you can get overrun by high-level information. But those around you can offer essential information on the ground. What marketing activities are working? What are competitors up to? These conversations help create more accurate budgets.
- Consider the merits of a specialist forecasting solution, geared towards the needs of small businesses and startups.
Do you need support in optimising and monitoring your business performance? Get in touch for a consultation with one of our dedicated Finance Experts.