Small Business Sales Forecasting: 4 Things to Consider Before You Plan Posted on January 8, 2016October 13, 2020 by Jonathan Herrick As a small business owner, the success of your business relies not only on executing in the moment but knowing where you are headed in the future. If you’re like most owners, it is easy to get sucked into the “one day at a time” mantra as you roll up your sleeves and run multiple aspects of your business. But in order for you to grow revenue, reduce expenses and thrive in the long term, it helps to step back and have a healthy focus on honing your skills at sales forecasting. What Is Sales Forecasting? Sales forecasting is a term that is often over complicated with enterprise jargon and tossed around without much explanation in the small business marketplace. Yet as an owner, you need to understand its importance and how it affects all aspects of your business. Let’s take a look at what a sales forecast is, the benefits and why to adopt a predictable model for your small business. The Definition of a Sales Forecast A sales forecast allows you to determine what your estimated sales (Revenue, New Customers, etc.) will be for a given time period. The forecast is generated from an analysis of previous data about your sales, the sale of similar products by your competitors, and market response to your offerings. Essentially, the sales forecast is a critical component of your management framework and it enables you to assess and improve key business initiatives such as: More accurate forecasting of expenses and cash flow projections Understanding the best venues for deploying marketing dollars Turning more prospective customers into repeat customers Adapting your product to better meet the demands of your customers Inventory management control Timely staffing and hiring How To Adopt Sales Forecasting A sales forecast produces an accurate representation of your projected revenue and growth for your business. As with any small business, cash flow is key to keeping the lights on and the doors open. By implementing a sales forecast and using it consistently you will be more capital efficient and get the best ROI for your sales & marketing budget. You will also be better prepared to know when you need to bring on new hires and expand your team. So before you build your sales forecast for the upcoming quarter and beyond, here are 4 tips to consider: Solidify Your Marketing and Sales Process Before you can accurately predict future sales and revenue, there first must be a predictable process in place for finding, converting and growing sales from customers. Otherwise your estimate will be like throwing darts at a dart board. On the money one month and way off the next. It’s all about putting together a systematic process that drives more opportunities that ultimately convert into sales month over month. So if you are using outbound methods to drive sales like cold calling, you may want to rethink your process and incorporate an inbound marketing strategy to create a more predictable and scalable process. Leveraging the Right Tools One of the easiest ways to create and follow an accurate sales forecast is to leverage the power of a small business CRM. A CRM will help you get to the sales and marketing data you need quickly and easily. For example, we use Hatchbuck to continuously reshape our sales process, propel new sales to small business owners and give us insights in our sales pipeline. In fact, we have successfully increased the company’s revenue by 2,300 percent since 2012, and this rapid growth was achieved without resorting to cold calls and “shot in the dark” marketing and sales strategies. With the right tools in place, we have the ability to track new sales historically, categorize lost sales by reason, and better analyze the number of leads per month by source. In essence, we get a complete picture of the entire marketing and sales funnel – helping us to better predict where we are having success and where to best allocate our resources next month and thereafter. We also have the ability to run real time reports such as a 3 Month Forecast Report to give us a 90 day snapshot of our sales pipeline by close probability. Also, financial software tools like Quickbooks can be a great source of product and expense data. These tools help you get the full picture on the total cost per customer and other important data points key to forecasting. Don’t Create Your Plan in a Vacuum To help you create a sales forecast for your small business that is achievable but stretches beyond the current performance – don’t go at it alone. I would highly recommend bringing in your sales team into the process since they will be responsible for achieving this upcoming year’s numbers. There is nothing worse than a team not believing in the reality of the goals and projections set out in front of them. By allowing them to take ownership in creating the plan, they are more likely to hold themselves accountable month in and month out. If you’re both the owner and the sales team, ask for outside feedback on your model. By bringing in an outside set of eyes you may be surprised what you find. Maybe you are overly optimistic and your plan is out of reach leaving you with a cash shortfall at the end of the year. Or possibly your sales forecast is not aggressive enough and not maximizing your capital as efficiently as possible. Measure and Adjust Once you have your forecast in place, don’t just let it collect dust. Access your monthly sales reports and compare actual performance to your forecasts. Determine what went right or what went wrong. Understand where you need to make adjustments to help you better manage your business moving forward. You may find you have an opportunity to invest more into marketing campaigns – further accelerating sales growth or driving higher profitability. If you miss your targets, dig into the causes to better understand where you have a bottleneck in your sales and marketing process: Are your salespeople under performing? Do you have enough sales people to respond to lead generation demands? Did you miss the mark on the number of opportunities generated? Did your sales conversions slip? Did a competitor win a larger percentage of the business because of a new product or service they launched? By looking for these trends connected to lower sales performance, you enable yourself to better forecast revenue and expenses for the future. Budgeting and forecasting may seem like a daunting task for your business, but you put yourself in the best chance to achieve your growth goals when you do. Start by solidifying your sales and marketing process, implementing the right tools, and taking a proactive approach to modeling your sales projections.
4 Resolutions You Can Stick to with Marketing Automation Posted on January 9, 2015June 18, 2018 by Jessica Lunk We’re just over a week into the new year…have you broken your new year’s resolutions yet? Each year, small business owners strive to get more organized, build better relationships with their customers and prospects, create a sales and marketing process and drive sustainable growth. Marketing automation tools built for small businesses can help you achieve and stick to these four resolutions in 2015. Get More Organized Fresh year, fresh start. If you’re like a lot of small businesses, you probably have one homogenous bucket of contacts that you would love to clean up and organized. Maybe you have two lists – one of customers, and one of prospects – but you can’t get much more detailed than that. Marketing automation helps you automatically and dynamically segment your contacts by their unique interests, their stage in the buying journey and their readiness to buy. It’s a bit like going from grayscale to a rainbow of contacts that each fit in their own ribbon of color. Contacts fit nicely into their own compartments. With an easier way of keeping your contacts organized, you can deliver more strategic, organized communication, increasing engagement. Build Better Relationships with Customers and Prospects This new year, many of us are striving to put away distractions – like our smart phones and tablets – and put more time into building better relationships with the people who really matter. While you may think that marketing automation is just one more technology that separates us from the people we should get to know better, it actually helps to cultivate more meaningful conversations. Marketing automation automatically tracks the online history of each contact automatically, so you can see what pages on your site they’ve visited, what emails they’ve received, and what types of content they read. With more information, you come to conversations with your customers and prospects prepared to have a productive, meaningful dialogue. In addition, marketing automation takes those ho-hum administrative tasks off of your plate, and triggers notifications to let you know which contacts are highly interested in your product or service. This makes it simple to connect with prospects that are really interested in learning more about your business. With marketing automation, you can focus more time on building strong relationships with ripe opportunities and loyal customers, rather than chasing cold leads. Create a Sales and Marketing Process You’d like to see your business grow this year, and you know you can’t do it without building better processes. When your database is more organized and everyday tasks can be automated, you can put a much smoother sales and marketing process in place. Without marketing automation, many businesses build up a large sales team that chases after cold leads. However, with a scalable marketing automation system in place, marketing nurtures prospects with personalized content, heating them up for the sales team. Then, the sales team is automatically alerted when hot prospects are ready to buy. The result is, individual sales and marketing leaders can be much more productive and process-driven because they are actively pulling in the right prospects to have meaningful conversations with. Drive Sustainable Growth We could all be a little less wasteful, whether we’re trying to recycle more or striving to get the most out of the talents of our small business team. With marketing automation in place, you can build high-quality relationships with many more prospects and customers – without adding supplementary team members. In addition, since marketing automation provides insights into which marketing channels are performing the best, and which sales leaders are closing the most business, you can make smart, sustainable investments in growth. Finally, marketing automation continually nurtures new leads you acquire. So if a new contact is not ready to make a purchase today, they aren’t tossed away. Instead, marketing automation continues to educate and nurture them, recycling them into a hot prospect. Get more organized, build better relationships, be more process-driven, and drive sustainable growth – imagine if you could stick to each of these resolutions in the new year. With the right tools for your small business, you can make 2015 the year of marketing automation, and the year of growth.
Warm Customers, Hot Profits Posted on February 26, 2014July 8, 2016 by Jessica Lunk According to researchers, customers who experience physical warmth are more likely to make a purchase. The researchers found that: Online shoppers were 46% more likely to hit a “Purchase” page when the daily temperature averaged 77 degrees Fahrenheit than when it averaged 68F. Customers in a warm room were willing to pay more that those in a cool room for 9 of 11 consumer items shown to them. Customers were willing to pay 36% more for items when holding warm, versus cool, therapeutic pads. Researchers say that physical warmth actually activates the concept of emotional warmth, drawing out positive feelings and increasing the perceived value of products. So, being physically warm triggers the emotional warmth that makes customers want to buy more and pay more. But, we can’t always control the temperature. Why not go straight to the source? Use your small business CRM to shine emotional warmth on prospects, increasing the likelihood that they’ll buy. If your CRM is more of a catchall for contacts than a sales and marketing machine, you’re missing a great opportunity to warm up to your prospects and customers, compelling them to make a purchase, spend more, and buy more often. The Cool Customer An American Express survey found that 78% of consumers have bailed on a transaction or not made an intended purchase because of a poor service experience. Customer relationship management is more than keeping contacts organized. It’s making your contacts feel valued, known, and well cared for. A better customer experience is built on great communication between all customer and prospect-facing teams. Sales, marketing, and support should leave a trail of breadcrumbs from each contact touch point to the next. If your sales and marketing process is broken, communication breaks down at the expense of your customers, prospects and your business: Instead of following up with warm leads, cold calling is the norm. Instead of being handled with care, customers with issues end up feeling frustrated. Instead of a smooth follow-up process, opportunities to close more deals are missed. Small Business CRM Heats Things Up An efficient sales and marketing process paired with a simple CRM melts these challenges away. First, a CRM can automatically track contact activity. Now you’ll know which web pages a contact has visited, which emails they have opened, when the last point of contact was, or if they’re in your deals pipeline. The more engaged contacts are with your business, the warmer – and more likely to buy – they are. In addition, a rock-solid sales and marketing process can tackle hard-to-trace touch points. Did a customer call in and chat with support? Did sales offer a discount during the sales process? With great notes on contact records, customers feel connected to your brand. They feel known when they reach out to you instead of feeling left out in the cold. This translates into happy customers who feel good about making a purchase. Better relationship management through small business CRM turns up the temperature for your customers and prospects. When your sales and marketing process is seamless and easily scaled, your contacts feel the warmth, translating into cold hard cash.
5 Unmistakable Signs of a Broken Sales and Marketing Process Posted on February 5, 2014July 8, 2016 by Jessica Lunk Process – sounds boring, right? But it’s actually a valuable tool in scaling growth while maintaining the size of your workforce. For businesses on the the precipice of explosive growth, taking another look at your sales and market process can be the difference between impactful penetration into the marketplace, or faltering while you attempt to ramp up new staff to do things the old way. Missed opportunities, dropped balls, and lack of communication are all symptoms of a sales and marketing process that needs a little love. Is your sales and marketing process watertight? Or can you see any of these scenarios happening within your process? 5 Unmistakable Signs of a Broken Sales and Marketing Process from Hatchbuck