What is predictability in the business? – WAU
Business predictability is able to help the company to make effective decisions, whether in the short, medium or long term, monitoring this metric is a powerful weapon to plan sustainable growth and scale the development of your business.
Can you imagine predicting how much your company will sell this month? And next quarter? What if you could project how much it will grow next year?
Think for a moment where such an indication could lead your company.
We are trying to draw your attention to a metric that you may not yet know, or know little about: sales predictability.
It is from it that it is possible to devise strategies to make planning that is sustainable and its main advantages are whether sales continued to happen and the stability of your business.
It is this indicator that we will talk about in this post. Stay with us!
What is predictability?
Predictability comes from the word forecast. In business it means: expected perspective of the actions you take to generate growth and positive results in your company.
Predictability is directly linked to the stability of your business transactions. The more you focus on strategies that make it possible to forecast the expected result, the more effective and efficient it will be for your company.
Maintaining predictability in your business is a key part of making decisions, get ahead in the direction you want your company to go, or even get ahead to solve possible problems that may arise.
For your company to be able to enter a growth cycle, it is very important that perspective data is anticipated. With them it is possible to make a plan and organize what will be the next steps in your business plan.
Why is predictability important to your business?
Enjoying a business that is predictable has its advantages, including:
- know if the goals will be reached after a certain period;
- clarify and inform interested parties what the expected result will be and what actions can be taken based on what was presented (in case the result is not within expectations, actions can be implemented to correct the route and reach the right destination);
- knowing where to focus improvement efforts;
- closely monitor the results produced by the team and consequently of each employee;
- know how much each area can grow in isolation;
- know in advance about promotions that can be made to increase the level of salespeople’s engagement with the goal.
Of course, many other advantages are included in the package, but you can already see how important it is to monitor this metric, even so that there is a certain type of job security for those involved in all the company’s processes.
How to have predictability in your company?
Now let’s explain some points that you can follow to start this metric, which tends to only help to improve the results of your business and make it level up.
Develop an implementation plan
To make sure that the project is consistent, it is necessary that a model of expectations is designed within the sales parameters that your company already uses.
Organizing what will be done, how it will be done and distributing the responsibilities of each stakeholder will be crucial for this type of implementation to be successful.
After that, correct any behavior that is outside the scope that you have already defined as being predictable.
Now it is only necessary to align expectations between all those involved, correct communication and tie up the possibilities of error.
In the implementation process, it is important to find the right tools for your business model.
They will do the heavy lifting so that you have the flexibility to focus on the strategy of how you will achieve the expected result. Meet some of them.
- Plan (plan): define the problem to be solved;
- Of (do): look for ways to solve the problem and measure its effectiveness;
- Check (check): check the results before and after the data comparison;
- Act (act): record the results, communicate to stakeholders about changes in the process and recommend for the problem to be solved in the next PDCA cycle.
SWOT Analysis is a four-point method of analysis:
- Strenghts (forces);
- Weaknesses (weaknesses);
- Opportunities (opportunities);
- Threats (threats).
With this resource, it is possible to implement an action plan that helps to consider and take advantage of strengths, perfect weaknesses, take advantage of opportunities and prevent threats.
Having a common system of mutual collaboration can be a differentiator to implement your predictability strategy, since each employee can contribute their insights in solving problems, which tends to increase productivity.
Business process management (BPM)
Its meaning is Business Process Management, and this tool is a set of practices for the optimization of processes that tend to decrease the margin of error in daily activities.
It is a way to improve the way your company works.
Collect and record data
The collection and recording of data is a basic principle to make the predictability of your business possible and scalable. Having your own data source will make your company’s forecasts increasingly reliable and intelligent.
But it is necessary to direct the collection of the data so that it is really relevant for its analysis.
Questions such as “Where to collect information?”, “What is the purpose of collecting data?”, “Is the data collected correct?” can save you time when you have to analyze them.
Analyze the data
Analyzing business predictability data will make you understand the process as a whole, and let you know from end to end what implications and opportunities are not being handled properly – so that your predictability plan has value and fulfills your expectations regarding your company’s venture.
Analyzing the data also allows you to create segmentations to offer improved service to your customers. And we know that a well-attended customer attracts new customers.
The analysis of data in the predictability of your business will also consist of a kind of support for any changes that need to be made in your company, whether for corrections, or to test new business tactics.
Create a report
Creating a report of what has been done, how it has been done will give you options of what can be done to correct any slips and close the gaps where all your team’s effort can go. More than that, be sustainable so that you can make decisions that are safe for your company’s growth.
It is important that your report is always up to date in case emergency changes need to be made. Making decisions based on guesswork can dramatically compromise all of your work, like that of other employees involved in the development of the company.
How to maintain revenue predictability and enjoy its benefits?
Train your employees
Empowering your employees is a very important step to achieve the predictability of your business. Making them able to deal with all kinds of situations can be a differentiator when their sales are not high.
Well-oriented employees tend to take ownership of the sales strategy and invest all the necessary resources to identify opportunities and expand their company.
Align expectations and goals
Goals need to be realistic. Setting surreal goals can be dangerous for the predictability of your business, even because it serves to guide your company in the search for shortcuts to grow the business.
So, set goals that will contribute to growth but also will not abuse how much your company can deliver.
Be alert to the chances of sales that may appear or even be created. Having a panoramic view of the market allows you to see hidden possibilities.
Having this productive mind also attracts predictability, as it is a way to leverage sales at a time of financial challenges.
4. Anticipate crises
To anticipate the crisis is to avoid losing money. Perhaps this reason is for your company the greatest benefit that business predictability can offer.
Many companies work hard just to have access to information like this available. This prevents the company from experiencing difficulties at various levels.
Take this advantage as one of the fundamentals of this strategy, it can free your business from going bankrupt.
5. Control default
Without closely monitoring default, it is impossible for the predictability of your business to work. There will always be inconsistencies in your report and that way you will not be able to predict what will or will not enter the cash register.
This means that it is necessary to manage risks frequently so as not to be caught off guard.
Business predictability is able to help the company make effective decisions in the short, medium or long term.
But don’t forget to consider a loss margin and manage the risks so that you don’t make hasty decisions that could harm the business.
Know that asking questions is the key to your business’s predictability to be successful.
Don’t be ashamed to ask, the important thing is to understand the problem in order to find the best solution to correct or correct your company’s forecast, whether you are a manager or an employee.
Finally, it is worth noting that sales predictability must always be associated with measuring their effectiveness.
Want to know more important metrics for your SaaS company to track? Be sure to check out our content on the subject!