Note: This is a condensed version of a guest post written by Ken Lane of Hathaway and Lane Direct (formerly of Jackson & Perkins Roses) on the Advanced Grower Solutions blog page.
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.
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