Revenue forecasting can be helpful to many different departments within a creative firm. An agency executive can reap many tangible benefits from having accurate forecasts on future revenue. From a project manager’s perspective, we need to make sure that we keep our superiors informed on how our projects are progressing. This way, we’ve got some foundation when we need to ask for another creative on staff, or to make a capital purchase.
So what exactly makes revenue forecasting so great that we feel justified in calling it an agency executive’s best friend? Read on to learn more.
A Well Informed Executive has Increased Decision Making Capabilities
By having a good idea of forecasted revenue, an executive is well informed of what the coming months will bring. This is the main reason one should closely follow revenue forecasting; how can you expect to make sound decisions without having all of the information available in the first place?
When you go to visit the boss’s office and ask for a staffing increase, you’re doing so because you know that you need another mind on your team. You know that the addition will increase productivity. You know that it will offset the costs associated with the new hire. But your boss may be less trusting. By coming prepared with revenue forecasting reports, you can show that you have a concrete plan on how the added staff will be used, where the expenses will come from, and how the costs will be offset.
Happy Executive, Happy Creative Staff
Your staff is getting a little rusty, and you think it’s because the furniture and computers could be updated. Can you afford to spend on furniture, or is it time to tighten the company belt for a little while? With an accurate forecast for monthly or annual revenue, it’s easy to know when to spend and when to save for a rainy day.
While keeping your staff happy is certainly important, anything that has some intangible merits to it (such as brightening the room with some new decor), can’t be tacked on to the quarterly needs budget. But when you can show that there will be enough revenue to cover the costs of adding a few new perks, decision-making is that much easier.
An Executive who Needs to Tighten the Belt Can Glean Knowledge from Revenue Forecasting
Correct use and distribution of personnel can make or break a creative firm. This highlights another important role of revenue forecasts. If you are getting more work than you can handle, but the projects you are completing are still profitable, it’s time to expand the creatives on staff.
On the other hand, if your project teams are sitting idle from time to time, it might be better to focus efforts on sales and marketing. When an executive can ‘see the future’ through revenue forecasting, she can determine which strategic direction the business needs to be headed in.
If your firm is small enough that you have an “all hands on deck” mentality when it comes to the work, this is still a valuable point to consider. If you’re not bringing in enough work, shift your focus slightly to make sure that you’re marketing the firm correctly, and finding the clients that need the work quality that you can deliver. And conversely, if your creative “department” is getting swamped with work, shift the focus back to the other side of the pendulum.
Having accurate revenue forecasting is one of the most important tools available to a creative agency. This is true whether you’re the agency executive trying to make the hard decisions for your creative firm, or if you’re the project manager keeping the team working hard to produce quality work.