Predicting developments in your business from sales, expenditure and profits allows us to develop new strategies. As a result, we can be better prepared for the future and any unprecedented events we may come across.
Christmas in particular sees a dramatic increase in sales and revenue for many businesses. However, we also need to be aware that this means investing in more stock and over-preparing for those sales spikes. Gareth Johnson from Chrysalis Growth has been working closely with businesses to obtain clear forecasting data.
Using past data from previous years will help to navigate this season and give you plenty of time beforehand to get to grips with what is coming up. You can then estimate how much stock you should be preparing, and what, if any, the dip after the Christmas rush will look like.
Predict Demand Growth
A really important aspect of forecasting for the festive period is to predict how much you expect demand for your products to grow from the previous year. You can use data from 2 years prior to track that growth and then estimate the newest changes.
This will have to take into account any extra exposure or reach you have achieved in the past 12 months. Many small businesses grow incredibly quickly over a short period of time, so you may even notice a more significant growth in demand than you were expecting.
Forecasting can help prepare for this and ensure you don’t underestimate consumers’ needs.
Another important point to note is events leading up to this years’ Christmas period. Especially for 2021, we have seen unprecedented times and didn’t even have a ‘normal’ Christmas last year. As a result, we can expect to see some differences in trends.
Firstly, it is safe to say that people will be continuing to utilise online shopping as they did over the lockdowns. While this by no means will result in sales taking a hit – it does mean businesses have to be prepared for this more popular form of buying.
Forecasting will give you the opportunity to recognise this early on and implement strategies accordingly. Whether this means improving your online platforms, presence or getting your website ready and able to see an influx of traffic.
Similarly, trends are seeing consumers start their shopping earlier. Most people will be making the most of being able to see family and even go away. With this prolonged holiday period – businesses are going to have to take into account the demand for extra days or weeks of Christmas shopping.
Business owners should be regularly forecasting for the coming months. But particular care should be taken when doing so in time for winter. There are many factors to take into consideration and different industries will be hit in different ways around this time.
With all of this being said, there is no saying how trends will change. Things can go another direction in a matter of weeks – this means businesses need to be on top of it. Forecasting keeps you aware of the ins and outs and how things change day to day.
Your business needs to be active in order to make positive changes to suit consumer behaviour. Being able to readjust to the market and optimise your resources will put you in the best position to get through the busy period.
Not only do you need to be ready for when it hits, but you need to make sure you have the capacity to continue trading afterwards too.
Many business owners will take into account demand – but not leave themselves anything for the new year. When you plan ahead and use quantitative data, it becomes much simpler to see how you need to account for the weeks after.
Suppliers and drivers could be in short supply during this time – leaving businesses stranded if they haven’t planned in advance.
If you’re needing help with forecasting or predicting growth within your business, Gareth Johnson from Chrysalis Partners works with owners to do just that. Implementing new strategies to keep up with demand and help your business thrive through every season.