“Success is not a random act. It arises out of a predictable and powerful set of circumstances and opportunities.” – Malcolm Gladwell
Predicting the future isn’t easy. And small businesses know this better than anyone. Economies are built on shifting sands. The last five years have shown that change is the only constant – and while that’s not necessarily a bad thing – uncertainty doesn’t make for easy planning. With this in mind Peter Harris, COO, Pipedrive discusses the ways that data can bolster sales at the front line of business.
As the UK economy shows green shoots of growth with GDP rising by 0.2% in the government’s latest tracking, businesses are conscious that growth isn’t guaranteed.
At the same time, the recent Budget announcements mean that businesses are scrambling to work out just what it means for them, their growth forecasts, hiring, and so on. Overall, it should provide a measure of predictability around the taxes and NI contributions that businesses can factor into their P&L structures. The greater public investment may help many industries unlock growth, though increases in NI, minimum wages and other elements will cause a drag for the majority of organisations. This may limit the private sector’s ability to invest in people and pay rises. That said, some sectors such as retail, hospitality and leisure do have relief on business rates and – so being a data-head and ensuring every factor is accounted for, and T&Cs are stuck to, is critical to stop unwelcome surprises.
For businesses to intelligently plan for the future, they must use their data as their ‘crystal ball’. Sales planning tools, supported by data analytics, can collect historical sales data, identify trends and create reliable sales forecasts. These forecasts help businesses forge future-proof strategies that help sales teams plan – and SMEs grow.
So how can leaders at SMEs accurately forecast through data?
What Your Data Crystal Ball’ Can Do
Data points reflect the past. But they also help us predict the future.
Predictive analytics analyses seasonal sales fluctuations, evaluating the impact of past marketing campaigns and tracking changes in customer behaviour. Through this analysis, businesses can make forecasts about future sales and plan for upcoming shifts in demand.
And these predictive tools are becoming even more powerful in the era of Artificial Intelligence (AI). AI tools are enhancing sales forecasts through:
- Historical data analysis. Machine learning algorithms can analyse enormous volumes of sales data and identify trends that might go unseen by the human eye.
- Factoring external variables. Machine learning models aren’t limited to historical sales data. They can also use weather forecasts, market indicators and more to make better predictions.
- Real-time forecasting: Machine learning algorithms can adapt to data in real time.
Tips for Small Businesses:
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- Track seasonal sales trends to anticipate fluctuations.
- Regularly review past campaign data to refine future strategies.
- Use customer insights to tailor product or service offerings.
- Look for opportunities to leverage AI tools that save time and drive efficiencies.
- Ensure all known elements such as rent, wages, NI contributions, tax, etc., are kept up to date. They can throw off the bottom line if not accurately calculated and reasonably forecast.
Strength in Numbers
Data analysis strengthens the entire sales funnel, from supply planning to budget preparation and targeted sales activities.
Accurate predictions enable companies to better manage inventory, prepare effective budgets, and focus on sales efforts with higher potential – helping companies avoid oversupplying or running out of stock by aligning inventory with demand forecasts. Budget planning becomes more precise, reducing the risk of overspending, and targeted sales activities generate better leads, creating a healthier long-term strategy.
Tips for Small Businesses:
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- Use data to optimise inventory and avoid stock imbalances.
- Align budgets with data-backed forecasts to control costs.
- Focus sales activities on data-identified high-potential customers.
Being a Multilingual Leader
Small business leaders are often a jack-of-all-trades. And accurate forecasting through data requires this quality.
Data-informed forecasting requires a leader who can connect sales, IT, and strategic functions. This “multilingual” leader bridges teams by translating data insights into relevant actions for each department – enabling sales teams to adjust strategies and bringing cross-functional alignment to business priorities. Predictive analytics is a tool, but a multilingual leader is its guide.
Tips for Small Businesses:
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- Encourage cross-departmental communication for aligned goals.
- Prioritise ongoing training to keep leaders updated on data trends.
- Make sure a strong grasp of numbers, and especially fixed and variable costs, are built into models and are always kept accurate. Basic errors should be banished as a source of confusion.
Businesses know that change is the only constant. But they also know, as Gladwell notes, that success isn’t random.
Staying on top of the numbers and budgeting for future success is critical to creating the plans and paths for growth. Predictive analytics enables a forward-thinking approach to sales planning and business future proofing. It empowers leaders to make informed decisions based on historical data and emerging trends. And for small businesses, that means making more accurate decisions that support sustainable growth in an uncertain world.
