Why Forecasting and Budgeting are Vital to Success

May 6, 2015

Today, we have a guest blog from Emily Hunter on the importance of forecasting and budgeting when making smart financial and HR decisions in planning a successful business model.

Adjust sales budget concept

Why Forecasting and Budgeting are Vital to Success

There are countless aspects to running a successful enterprise, and forecasting and budgeting are amongst the most important. Without a proper focus on these aspects, a business can easily spend too much money, make errors in hiring and have different departments in a company working toward competing goals. Let’s take a look at some of the more important reasons that budgeting and forecasts are so vital to keeping your business in sync.

Planning for the Unexpected

One mishap or emergency can sometimes spell disaster for the entire company. Being ill-prepared for these events can result in a company going out of business or, best-case scenario, having a long run of unprofitable months. This is where budgeting and forecasting models are so essential. Though a time may never come when a contingency plan is necessary, having one in place is still important.

Forecasting potential issues can help a company stay afloat if, for instance, a top producer in the corporation departs. Having a financial plan set up to keep a company going strong in this instance, and in many others, prevents any one department, individual or another aspect of a company from being the only thing keeping it successful.

Making Appropriate HR Decisions

Some companies hire an overabundance of new employees with the idea that they’ll need them in the long run. This can be an unfortunate decision if proper budgeting and forecasting solutions aren’t implemented. Discovering that unnecessary resources are being spent can sometimes result in angry former employees and increased unemployment insurance costs.

Fortunately, enterprise resource planning (ERP) solutions can help in this situation. Because these types of tools allow multiple departments to simultaneously access information and data related to inventory management, product planning, marketing and a variety of other aspects, it’s easier to forecast staffing needs instead of making pointless hires. In the end, this can save untold expenditures in training and other human resources expenses.

Improving Income Statements

Operational plans are essential to forecasting projected income for a corporation. Making them more efficient is a great way to improve budgeting and forecasts, and thus be prepared for events which could impact a company’s progress. Creating these plans is much easier and produces better results when cash flow statements and balance sheets are integrated between all departments.

Increasing Good Collaboration

Effective budgeting and forecasting tools can also ensure that collaborative projects run much more smoothly and efficiently at any company. Simply imagine an individual ordering inventory without realizing that another employee has just made a huge sale that will diminish much that is on hand. Similarly, someone focusing solely on inventory without realizing that the approaching month’s sales will be slower can result in overstock.

ERP software can go a long way to prevent such mistakes from occurring. All employees who would benefit from access to the forecast model can be added to the shared permissions for any collaborative sections. This allows for more cooperative human resources; when each employee knows the full circle of their tasks, it is less likely that costly mistakes will be made.

Recognizing Growth Opportunities

Properly created budgeting and forecasting models allow a company to make informed decisions on whether or not they can expand. By using the reports derived from this data, it’s possible to answer questions such as: “Can we afford another employee in Department X,” or “Will increasing production result in enough sales to still cover overhead costs while still turning a profit?”

There are not many aspects of a company that the elements of forecasting and budgeting do not directly affect. Because of this, an ERP software solution containing these elements is certainly amongst the best software investment a budding entrepreneur can include in their budget. The aforementioned benefits are just a small sampling of what a successful budgeting and forecasting model can do to ensure your company’s ultimate success.

Emily Hunter is a SEM Strategist and Outreach Supervisor at the Marketing Zen Group, working closely with TGO Consulting. She loves designing strategies with her team and is excited about spreading the Zen gospel. In her spare time, she cheers for Carolina Crown and Phantom Regiment, crafts her own sodas, and crushes tower defense games. Follow her on Twitter at @Emily2Zen


Did Your Website Survive Mobilegeddon?

May 5, 2015

And Did You Know It Happened?

By Chris Ilcin, Account Superintendent at Sonnhalter

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(image courtesy of CNET)

On April 21st, Google changed its search results algorithm.

Sounds boring, right? Well the results of that change may impact your business more than you think. As of that Tuesday, nicknamed Mobilegeddon by various media outlets, the mobile friendliness of a site is now a more important factor in ranking mobile search results. Why the change? Because the way we access the web is changing.

Last year, it was estimated that over half (60% by some estimates) of all online traffic was from mobile devices. Facebook reports that 85% of daily access to its site is from mobile devices, and last holiday season, Amazon stated that 60% of all sales were from, you guessed it, mobile. At the same time, Google’s dominance in mobile has slipped. As more and more mobile search comes from apps rather than true search, so has their share of traffic and revenue. In 2014, they reported 68% of all mobile search revenue. Impressive, but dramatically down from the 82.8% only 2 years earlier.

So What Can You Do?

First and foremost, find out how mobile friendly your website is. Google has a site, here, that will score your site (tradesmeninsights.com scores an “awesome”) Now that you know, there are several steps you can take:

  • Add some elements to your pages to make them more user-friendly:
    • Have text that is readable without tapping or zooming
    • Make sure tap targets are spaced appropriately
    • Avoid unplayable content and horizontal scrolling
  • The update applies to individual pages, not entire websites, so make sure your most critical pages such as product pages, receive mobile makeovers first.
  • Pages being a good search match still trump mobile-friendliness, so make sure you know how people search. Customers probably aren’t searching by product number, so make sure your pages contain common keywords and industry-specific slang.
  • This new criteria only applies to mobile searches, so know how your customers are finding you. It may be that you don’t need a mobile strategy right now. But keep in mind that the biggest name in search has a mobile strategy, so soon you’ll need one too.

Stop and Smell the Roses

March 31, 2015

By John Sonnhalter, Rainmaker Journeyman at Sonnhalter

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Last week I was reminded of how fragile life really is. I lost a friend who was only 57 and appeared to be in great health and they found him at work in his car. One really doesn’t know when your time is up.

It got me to thinking that in this world where emails are the last thing we check at night and the first thing we check in the morning might not be the most important thing in the big picture. I know I’m guilty of that as much as anyone.

Maybe we should step back on a more frequent basis and appreciate our families and friends more. Oh, by the way you, should tell them! Play hooky some afternoon and take your grandkids out to the zoo. Take your wife on a picnic.

I guess as I get older I don’t want to be remembered as the guy who had a successful career but never took the time to enjoy life. There’s got to be a better balance in life. I know this might be a little late for a New Years resolution, but I think I’m going to stop and smell more of the roses.


PMPA National Technical Conference- Empowering Your Team

March 30, 2015

tradesmeninsights:

great event for manufacturing. Learn and share with peers

Originally posted on Speaking of Precision Blog:

The National Technical Conference is one of PMPA’s most valued deliverables. Produced by members for members, this conference shares how- to‘s across the full range of our industry’s challenges- Operations, Management and Quality. Presenters are people that can (and do!) do the work:.

  • Building an Effective Training Program being presented by Shingo Silver Award winning shop experts Dan Vermeesch of Micron Manufacturing company and Dave Masereau of Boston Centerless.
  • Gary Griffith (our highest ranked presenter) is back with a great workshop on GD&T.
  • Diane Thielfoldt with more about our millennial workforce.

Plus sessions on Troubleshooting,  ISO 9001:2015 , Rapid Improvement Events, Finish Issues, Shop Floor Math, Innovating with CAM and CNC, Print and part review– to name just a few. This conference is truly packed with a host of opportunities for your team to bring back new ideas and  new capabilities to your…

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Are Field Salesmen Dead?

February 18, 2015

I recently read an article in Industrial Distribution Magazine by Justin Roff-Marsh that basically said that the industrial distributor field salesman, as we know it, is DOA.

I don’t know what planet he was born on, but it wasn’t this one! If he was, he would realize that to survive against the big national brands, they must have a unique selling proposition and a strong brand promise.

Granted, if you’re a general line house, your survival rate isn’t good. But most distributors today focus on either a market (Electrical, Plumbing, Construction, etc.) or in specific disciplines like power transmission, cutting tools or industrial hose and fittings. They become experts in that field and customers depend on them for not only product, but advice. This is how they can compete with the Biggies like Grainger and Fastenal.

Speaking of the big boys, who’s going to tell them to stop opening more brick and mortar stores and by all means don’t hire any salesmen!

If this guy did his homework, he’d know that in these models, a lot of their customers come to them. I bet he’d be surprised if he were to walk into a STAFDA, electrical or plumbing wholesaler between 6:30 and 9 any morning, that he’d have a pretty good chance of being run over by customers picking up stuff. And they’re not just picking up an order, they’re talking with counter people on how to solve a particular problem. What’s that worth?

Granted, the role of field salesman has changed over the years, and I don’t expect anyone makes cold calls anymore. But the seasoned field salesman is worth his weight in gold. He’s aware of his surroundings as he walks through a plant or construction site identifying opportunities for new sales. You can’t do that on a phone call or an email.

Years ago, I was making a sales call with a salesman who was called into a customer who was having some production problems with cutting tools. I was amazed as this salesman walked onto the shop floor and walked directly to the CNC machine that they were having trouble with (without even being told ) by just listening to the sound of the machine. He suggested a few adjustments to the feeds and speeds and the problem was solved. The point is, they don’t teach that in college or anywhere else. It comes from experience.

I guess the point I’m trying to make is people still like to buy from other people. If you have value and can help them do their job better, you can bet they’ll make time for you. Look at independent buying groups like Affiliated Distributors or NetPlus Alliance. Each year, they post strong sales growth despite the growing competition. I’ll bet field salesman come into that equation somewhere.


Want a Way to Attract Young People? Try a Ride and Decide Job Shadowing Program.

February 11, 2015

For those of you who read my posts on a regular basis, you know I’m concerned about the long-term viability of all the trades because the older tradesmen are retiring at a far greater pace than young folks coming in. I recently read an article in Contractor Magazine that said that out of every 4 people who leave the trades, only one is entering the field.

Gordy Noe, president of Pioneer Heating and Air Conditioning  in Knoxville, Tennessee, has come up with a unique program called, “Ride and Decide” where he hires high school students for summer jobs and puts them to work. It gives them a chance to dip their toe in the water and see what opportunities are out their other than a 4-year degree.

It’s a win-win for everyone. Young folks get paid work for the summer break and get to experience a trade that they wouldn’t have the opportunity to otherwise do. Contractors get to show them firsthand what they do and what the potential earning power is in the trades. Here’s an interesting stat – only about 10% of those that graduate college actually get a job in the field they studied!

This program is a great model that other contractors across the country might want to try. Talk with local high schools and post jobs both in the schools and online via the social media outlets. Don’t try to do it all on your own. Go to your trade associations like the PHCC or NECA. They certainly should have resources that will help you attract the attention of the younger set.

Who knows, you might be able to start growing talent from within. You could hire these young folks, and as part of their training, offer them educational support by paying for classes at a local trade school or community college.

If you liked this post, you might find these of interest:

Education, Recruiting and the Trades – a Small Step Can Make a Big Difference.

Attracting and Retaining manufacturing talent.


Email Marketing: Still a top performer

January 27, 2015

Do you know that the average office worker checks their email 30 times an hour? Can you imagine what the stats are for contractors out in the field?

The point is that emails are very acceptable ways of communicating with each other. The key is to have relevant and timely info for your prospect.

Heidi Cohen gives us several reasons why email trumps social media:

  • Email provides directly measurable ROI – You know immediately how many opened and read your message.
  • Email is content format agnostic  It’s user-friendly and you can use text, images, videos, audio, PDFs.
  • Email can deliver both long and short content – Content can vary from a link to several pages in length.
  • Emails you can control delivery – Whether it’s now or delayed.
  • Emails can be read on anything – Smart phones, tablets, laptops, no apps required.
  • Emails build customer relationships – Once someone allows you to communicate with them, it represents a certain level of trust.

So since you have such a powerful tool, we need to make sure we’re using it correctly to get the best bang for the buck. eMarketer, in a recent article, stated that we all should get ready for more personalized emails and companies plan on spending more money to accomplish this.

These triggered and transactional emails can be part of a nurturing campaign. The key is getting the right message in the hands of the right people at the right time. You need to ask the right questions to see where they are in the sales funnel so you can address that immediate need.

If we use and target emails correctly, whether you’re going after a contractor or a plant manager, the result improves with the more segmenting you can do. So do your homework and take advantage of a great marketing tool.


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