It’s time to look ahead and forecast a successful year in business. As we replace our calendars and jot down all of the important dates for the year ahead, it’s natural to look ahead and lose sight of the rear-view mirror. We start making future plans for our business. Then, we’re actively forecasting what we hope and expect to come from the next 12 months. Most years, this process is as simple as revisiting our data for the year. We draw up some general projections based on our current performance.
This year, of course, is not like most years. With dwindling sales and stagnant activity in 2020—not to mention, a whole load of uncertainty in 2021—how can a small business owner or freelancer easily anticipate what’s to come for their business in the upcoming year?
How to Forecast a Successful Year in Business
Revisit your year-to-date numbers.
The change of year calls for an evaluation of the prior year’s data to determine where you currently stand. Whether you’ve been scouring your numbers or intentionally ignoring them, now is the time. After the way 2020 went, this may not be a comfortable process. You might not be happy with the assessment of your annual performance. That doesn’t mean you can leave them on the backburner.
Regardless of how your business performed in 2020, that information will serve as a comparison point for 2021. And if you want to improve, you need to have those benchmarks to identify progress. Review your CRM platform. Tally up all of the data that equates to success: number of inquiries, consultations, bookings, average revenue per client and total revenue. This should not be seen as an emotional process. Rather, it should be an enlightening one. It will lead you to bigger and better performance in 2021. Leave the negativity behind. Instead, work on building hope for the future as your forecast a successful year in business.
Consider a wide range of possibilities as you forecast a successful year in business
There’s a lot in the air when it comes to 2021. On one hand, we might see the rebirth of the wedding industry and a surge in live events as the vaccine is released and people are safe to gather again. On the other hand, there are predictions of an economic recession in the U.S. that might force all business owners to get creative to make ends meet.
As we go into the new year, it’s essential to consider all possibilities. Use data from prior years to get a feel for what your best case scenario looks like, as well as your worst. If you’re raking in revenue, how will you make use of that influx of assets? What happens if you’re pushed to consider shutting down your company or pivoting to offer new services and products? More than likely, the reality will fall somewhere in the middle of those two extremes, but preparing yourself for anything will help safeguard your interests and ensure that you’re making the most prudent business decisions as you forecast a successful year in business.
Identify unique opportunities and threats.
Due to the pandemic, there’s no doubt that 2021 will look different from previous years. In that, businesses will face unprecedented opportunities and threats in the marketplace. Consider what that might look like for you. Have you contemplated pivoting your business in a new, advantageous direction, like embracing micro-weddings, virtual events or adding new services or offerings? Will health and safety measures impact the growth of your company this year? How is your target audience reacting to the present circumstances?
These new factors might make all the difference in how you forecast your year and, ultimately, influence the goals you set for your business. 2021 will be unlike any other year, so it makes sense that your business predictions will have to consider these new-to-us notions that will continue to influence the market at-large.
Create realistic goals.
The keyword here is realistic. Would you love to triple your revenue in 2021? Of course. Is that feasible? Perhaps not. However, assessing your past data and current situation will help you set realistic goals while you forecast a successful year in business. When your goals are achievable, you can keep the motivation flowing and feel empowered to reach the finish line. Unrealistic goals, on the other hand, have a way of making us feel like we’re not measuring up to expectations and tanking our morale.
Based on your projections for the year ahead, set some attainable goals that you can measure your progress towards. “Getting rich” might be a worthy ambition, but who’s to say what “rich” actually means? Instead, set quantitative goals like “increase revenue by 15%” or “decrease cost of goods by 10%.” When you use firm numbers to define goals, you are better able to set milestones to track your headway throughout the year.
Accept that it won’t be precise.
At the end of the day, business forecasting is never precise — even in a picture-perfect year. It’s more of an art than a science and, unfortunately, there is no crystal ball that will tell you all of the highs and lows in your business’ path. However, a rough idea is always better than going in blindly. So going through the motions to forecast for a successful year in business will help you to conceptualize possibilities and create game plans that will protect you from risk and ensure that you’re ready to jump at any new opportunity.
Thus, it’s important to keep your future plans flexible, so you can be prepared to adapt, adjust and pivot your business as needed. While your predictions are not exact (particularly this year!), forecasting is a tool that allows you to be proactive rather than reactive, which is a position you should always seek. During times of uncertainty, the smartest and savviest business owners are those who are always preparing for every good and bad possibility.
While it might seem easier and safer to just push forward and forget 2020 altogether, the only path to success is one that recognizes that obstacles and opportunities that lead us to where we are today. Stay true to your brand and open your mind up to what the year ahead may hold. In the process, you’ll be carving out a more profitable future by protecting your business and preparing for whatever may come.