Only 30 days left in the year. And with all of the year-end things to do and possibly meetings you had to attend, many are just getting around to doing their 2017 planning … or at least sales forecasting.
The planning element … determining how you want to affect change in your “environment” whether through service offerings, operational improvement, personnel “enhancement”, focusing on price management, promoting your business (marketing) can take time and should involve input from others on your team. It’s a more involved process.
Sales forecasting, on the other hand, can be “sophisticated” for larger organizations, some of whom use a bottom-up, account based methodology, or it can be prior-year based with seeking to weed-out one-time anomalies. And combinations can also be used that then integrate the expected benefits of new initiatives and your plan (promotions / incentives, acquisitions, new openings, new salespeople, etc).
And then, for some smaller companies (or branches of decentralized national chains), the key to sales forecasting is insight into the expected “ebb and flow” of the market. They want to know “what will the market do next year?”
The Crystal Ball
While this approach basically says, “I’m content with my share but I need some information to share with other shareholders, banks, stakeholders or provide my employees with goals”, below are some industry projections:
- At the NAED Eastern I spoke to manufacturers and distributors. Depending upon the end-user focus, feedback was for 3-6% for 2017.
- Electrical Wholesaling’s 2017 Market Planning outlook is nationally for 3.1%. The Market Planning Guide also shares regional outlooks and this year they’ve add some state specific marketplace insights. The Market Planning guide also provides some multipliers to provide additional insights for distributors.
- DISC’s current projections for 2017 is 4.7% with slightly lower for the industrial market and slightly higher for the contractor.
- At the AD meeting, based upon AD solicitation of some manufacturers, projections were .7-3% (don\’t know their segment focus.) And this was in late September / mid October.
These projections are national in nature. The EW information is based upon survey feedback; the DISC projections is based upon their algorithms.
Another tool that smaller distributors, or branches of companies, could use is asking their manufacturer reps what their factors are projecting or asking factory direct personnel what their local sales increase goal is.
However, your performance could be impacted based upon:
- Your focus / success in the energy efficiency / lighting retrofit space.
- With the recent increase in oil prices and rig counts distributors in some of the shale areas could see some resumption of drilling and oil production which would stimulate activity.
- The recent rise in copper, if sustained, could increase distributor revenues and gross profit dollars.
And then, obviously, if there are opportunities specific to your geographic area.
While none of the projections may turn out to be accurate, they are a place to start. The reality is sales forecasting is more art than science, especially at the local level due to not having the crystal ball to project marketplace dynamics twelve months in advance.
Need some help with planning? For the weeks of December 5th and 12th we’re offering a limited number of free 30 minute consultations. Feel free to email your request and specify available times. And if you need help with planning we can provide a quick process or a more in-depth planning process … as well as ongoing advisory services and our super low cost telephone advisory service Lumiere.
The key is starting with developing your plan.