Predicting Your Future: Business Forecasting “Best” Practices

By Carolyn Allmon

Carolyn Allmon Business Forecasting Services

As Henri Poincare said, “It is far better to foresee even without certainty than not to foresee at all”.  With that in mind, here are some guidelines to help your business foresee its future:

·       Maintain an accurate historical data base for whatever you are forecasting for the relevant time period in which you want your forecasts —months, weeks, quarters.  As a general rule, more is better.

·       Understand what’s behind the data.  Be able to explain high and low points in each series.  

·       Use forecasting software to generate a base-line forecasting model and adjust as appropriate based on input from the experts.

·       Beware of the biases of your experts.  Each will have a different perspective based on their area of expertise—e.g., Marketing and Sales may be overly optimistic.

·       Develop and maintain a regular disciplined process to generate the forecasts. Document any adjustments made to the base-line forecast.

·       Measure your forecast accuracy regularly to monitor success.  Set realistic accuracy expectations based on your own experience.

·       Focus your forecasting efforts on what is most important to the business.   Forecast the others using simple, automatic or judgmental methods

·       If your data is difficult to forecast due to volatility, see if you can change it to make it more forecastable— e.g., can you persuade your customer to order more regularly to minimize large peaks in your data?

·       Incentivize the behavior you want— e.g., if you want your sales force to give useful input to the forecast, reward them accordingly.

Preparing Our Business for the Economic Recovery

By Alan Winner


Preparing our business for the economic recovery includes re-aligning relationships with third-party vendors, suppliers, contractors and consultants. 

During the recession, we restructured operations, downsized, outsourced certain functions, re-deployed resources and adjusted our business plan.

But when did we last review our third party agreements with suppliers and vendors? How do the terms and conditions of doing business with these resources compare with those of our peers or competitors? As we recover from the recession, what terms need re-assessment, revision, replacement or elimination? Are there new concepts or methods that would serve us better in the current environment?

Frequently, our third party relationships are deep and long standing, which can make these discussions sensitive and difficult. Planning is essential and style, manner and approach can make all the difference in a mutually successful outcome. It may be better to have a disinterested party participate in the discussions when personalities and relationships are especially close or meaningful. After all, valued vendors, suppliers and contractors provide critical support roles in how we perform for our customers and clients.

Beyond cutting expenses through better unit and volume pricing, reduced fees, higher rebates and allowances and ancillary services at lower rates (or free), consider other aspects of the relationship that may have value:

• ·         Other products or services A vendor may have products or services that were unavailable because of pre-conditions or qualifications (e.g. minimum volume or dollar amount orders, geographic restrictions, or store layout, size or amenities). Now may be the time to have such conditions or qualifications relaxed, reduced or altered, so that new products or services or better terms can be introduced to customers.

• ·         Improved service If our vendor or supplier’s performance before, during or after the order or transaction is weak or erratic, or rebates and credits for volume-based orders have been error-plagued, now is the time to correct these problems and introduce protections against further miscues.

• ·         Flexibility Perhaps a vendor’s performance or conditions for service are rigid, scheduled or uneven, and greater flexibility to adjust purchase, delivery, maintenance or service cycles that match better with our business needs can add value.                  

With the right preparation and analysis and skillful deployment, seeking concessions or adjustments with valued third party vendors can occur without damaging the relationship, and in certain instances even enhance it.

Alan Winner

Principal

Ballast, LLC

www.ballastbusinessnegotiations.com

alanwinner@rconnect.com

Eden Prairie Awarded $275,000 Grant for Road Project

By: Dave Lindahl, City of Eden Prairie

In May the City was awarded a $275,000 grant through the Minnesota Department of Employment and Economic Development (DEED) to help pay for a $825,000 road improvement at Valley View Road and Prairie Center Drive. The grant is part of DEED’s “Innovative Business Development Public Infrastructure Program,” created to fund infrastructure projects that support job growth. Many businesses in the Golden Triangle will benefit from this project which is expected to significantly reduce congestion at this busy intersection.  Letters of support for the grant were provided from Compellent, VISI, and BOSE who are all expecting to add job in the next few years. Excerpts from the letters include:

“Our current estimates are that we may hire an additional 300 employees just in Eden Prairie over the next 12 to 15 months. The traffic situation at Prairie Center Drive and Valley View is a major concern for our employees. The congestion late in the day presents significant commuting delays to our team and a safety risk. Your efforts to alleviate this situation are greatly appreciated.”

Jack Judd – CFO

Dell/Compellent

 

“The congestion on local roads has caused troubles for VISI in the past and has required us to adjust accordingly. We appreciate the City of Eden Prairie’s efforts to improve the road infrastructure and support the initiative to improve traffic flow. During the construction the construction  

Mike Sowada – CEO

VISI

Valley View Road will be widened to provide a dedicated right turn lane from westbound Valley View Road to northbound Prairie Center Drive. It also includes adding double left turn lanes from westbound Valley View Road to southbound Prairie Center Drive, and restructuring the intersection signals.

Welcome!

By: Pat MulQueeny, President
Eden Prairie Chamber of Commerce

As part of our strategic plan, the Chamber is working on becoming a hub to connect all industries and sizes of businesses.  Earlier this year we gathered data and feedback from our annual survey of members.  One of the topics included in this survey was members’ interest in business blogs.

Since then, our Business Development Committee has been working on producing business blogs on topics that will be of interest to our members.  We are pleased to start that blog today.  Dave Lindahl, the City’s Economic Development Manager, has provided us an update on an important road project in Eden Prairie – please take a few minutes to read this information because it may impact you and your businesses.

In the coming weeks and months, we will have additional blogs from our members on a wide variety of topics.  Please read these, pass them on to other employees, and join the dialogue by sharing your own comments and expertise.  If you are interested in providing a blog in the future, please contact Sammi Dummel at 952-944-2830 or by e-mail at communication@epchamber.org.  We hope you gain some additional insight and knowledge from these blogs.