This post is part of our Guest Expert Post Series and is written by Ken Lane from Hathaway & Lane Digital (HLD).

Thanks to the folks at Advanced Grower Solutions (AGS) for the opportunity to share some thoughts about forecasting for your business, one of the most important functions since Covid hit. I connected with AGS soon after Covid and our business thoughts have been in sync ever since. My consultancy – Hathaway & Lane Direct (HLD) is a team of data-driven thinkers who help companies use their data and our exclusive “RI” (real intelligence) to help build a better business. These skills have become especially important with All Things Forecasting since the pandemic.

Let’s call this blog series “Strategies & Tactics You Need To Know To Improve Your Forecasting Success.”

I like to start things off with quotes and the one that is most suitable for this subject matter is from Steven Covey – author of the Seven Habits series of books – and one of the most profound thinkers of our time. Mr. Covey died in July 2012 but his legacy lives on through Seven Habits and through the Franklin Covey Institute. I had the extreme pleasure of hearing him speak to a small audience many years ago during my tenure as Director of Marketing for the Jackson & Perkins Rose company.

One. “Start with the end in mind.”

While this has many connotations, business and otherwise, it is quite apropos for forecasting in the horticulture industry.

Simply stated, you need to know where you are going and then build a forecast…realistic, based on data, acceptable from your management team, attainable and achieving the company’s P/L objectives. Phew…that was a mouthful. Easy, right? Perhaps not, but maybe it can be.

Two. “Understand, Measure & Manage the KPI’s that matter for your Forecasting needs.”

Simply stated, it is tantamount for your forecasting success that you need to know the KPI’s – Key Performance Indicators – of your business. If you have been doing this for years, or worked for your company for years, this might be easy to compile. You may have some metrics from a previous job or position that are relevant and applicable for your business. Add these to the collection. Ask others in the organization what numbers they look at on a daily/weekly basis (etc.) and add these, as well.

Create the “per” KPI’s along the way…. per order, per customer, per association, per greenhouse, per acre, etc. Understand your historical “curve” …the Percent Complete curve…that allows you to assess progress versus your history.

The key to success using this tool is understanding that the curve ends at 100%. If your YTD revenues forecast, based on historical curves, is running “significantly” ahead or behind budget, you need to adjust the endpoint to reflect where the 100% of the season might be and then react accordingly.

While it may sound silly, KPI’s are numbers, not words. A pet peeve of mine over my entire career is when a question is answered with “a lot.” A lot is not a number. Try to double “a lot” next year…you need to be as specific as you can be at each level.

Case Study:

 We have a client at HLD that, when he starts with the end, determines his revenue expectations for a rolling three years. A direct to consumer (DTC) marketer, he knows that each additional greenhouse is capable of generating $2 million in revenues. And while it might go without saying, if those greenhouses don’t’ get built (labor, cost, time), they are not going to hit their revenue expectations.

In our next issue, we will discuss Phantom Demand…no, not an Andrew Lloyd Webber musical…It’s your secret weapon in building your most accurate forecast ever.

Advanced Grower Solutions has partnered with Hathaway & Lane Digital offering Custom Grower Sales Forecast and Sales Analysis. The combined expertise is unparalleled in the industry, providing guidance to drive your business forward.

Contact us for more information.