Somerset, Dorset and Devon boast some of Britain’s best producers of speciality food and drink. Businesses that make the very finest ciders, chutneys, charcuterie, confectionery, cereals, and chillies – plus some cracking cheeses!
Speciality cheese makers were hit especially hard by the lockdown imposed in March. Overnight orders from restaurants disappeared and sales were lost as markets were suspended and supermarkets closed their deli counters.
Sometimes in business, doing nothing different, and waiting for the world around to sort itself out, is a good option. This was not one of those times. Without sales cheese makers could run out of cash and maturing storage space, be faced with having to throw away raw milk and surplus cheese, and potentially lose staff with irreplaceable skills. They approached the challenge in various ways but many focussed on developing online shops.
Most of us aren’t able to spend our lives producing glorious handmade cheese but whatever our line of business it’s clear that disruption and uncertainty are going to be with us for many more months. So, how should we make critical business decisions in the face of uncertainty?
A tried and tested way to get uncertainty under control is to forecast your business results with a range of different scenarios that take into account all the current restrictions and uncertainties along with the initiatives you might take to deal with them.
None of us knows what is going to happen next week let alone during the next 3 years. Although we can’t predict the future we can prepare for it. Here is my recommended approach:
- To assess how well prepared you are at the moment, start by forecasting what happens to your business if you ‘do nothing different’ but simply accept what the world throws at you without any new initiatives. There should be several versions depending on different assumptions about new restrictions and how long government support might last.
- To assess the benefit of ‘doing something different’, prepare new separate forecasts for each potential initiative. You will need to take into account timescales, prices and different cost structures. Don’t be tempted to only forecast your favourite idea.
- Make informed realistic decisions based on the forecasting work. Don’t assume that next week there will be a vaccine or you will win the lottery!
- Having chosen a strategy keep your forecast alive by updating it with actual numbers every month to create an increasingly accurate rolling forecast to guide decision making.
With modern software cash and profit forecasting is no longer a laborious inflexible process. Get in touch if you need help to assess your choices and navigate your business route through these uncertain times.