With 2024 approaching, now is the time to start your retail business forecasting. If you’ve never done this process before, today’s episode will walk you through the first step: looking at the commitments you’ve already made, the trips you’ve already booked, and any events you know are on the books.
Read on to learn what retail business forecasting is, how you can get started, what you can expect in 2024 based on what’s already on your calendar, and how going through this process can preemptively reduce overwhelm before the new year.
What is Retail Business Forecasting?
According to Heavy.ai, “Business forecasting refers to the tools and techniques used to predict developments in business, such as sales, expenditures, and profits.”
Investopedia says, “Forecasting is a technique that uses historical data as inputs to make informed estimates that are predictive in determining the direction of future trends.”
Business News Daily defines it as “the process of looking at past and present data, as well as marketplace trends, to predict the company’s future financial performance.”
Whatever words you use to define forecasting, it’s definitely a look into the future.
The First Step of Retail Business Forecasting: Looking Ahead to 2024
Of course, retail business forecasting is far more complex than I can cover in a single podcast episode or blog post. But I want to introduce you to the idea of forecasting and give you a peek at what 2024 might look like for your business.
Let’s consider the high-level view of your business that you could see if you were a drone far up in the sky, looking down at the entire year.
There will be some unknowns when you’re looking at an entire year. You can’t predict the future! And there are going to be things that you couldn’t possibly anticipate.
But some things we can plan for in advance. For example:
- Do you know you’re losing a long-time, trusted manager to another opportunity?
- Do you have a major surgery planned in Q2?
- Is your lease ending next year, and might you consider a big move?
- Are your twins graduating from high school, and will you be involved in planning the senior graduation party?
- Will you be or become the primary caretaker for an aging or sick parent in the new year?
- Did you just expand your business and expect it to grow even more because of the new product lines you’re carrying?
Take a few minutes to write all of these known events down. I like to use a large year-at-a-glance dry-erase wall calendar in my home office. This calendar is one of my favorite planning tools. You can get the dated version here or the undated version at this link.
Once I take this first step to write down everything I know is coming, I can start determining what type of growth to anticipate.
How to Categorize Your Anticipated Retail Growth
The next step is determining your level of growth and placing it into one of four categories: sowing, inching, growing, or exploding. I created these categories to give myself a clear picture of what happens yearly in my businesses.
Let’s look at what each category entails, along with examples from my businesses.
If you’re sowing, you aren’t expecting any growth. You just want to sustain what you’ve built when facing a busy year—or dedicate a good amount of time to planting seeds for future growth.
For The Salvaged Boutique, the store I co-own with my sister, 2019 was a sowing year. It came right after an exploding year (scroll down to read about 2018!).
We dedicated 2019 to getting all our inventory into a new system, which was a massive process. We were open for several years before we realized we needed an inventory management system, and 2019 was the year to fix that.
Inching years involve very little growth. If your business does grow, it’ll be measured in the low, single-digit percentages.
2022 was an inching year. We were midway through a long, messy, and dusty physical expansion.
Once we’re into the double-digit percentages of growth, we’re growing!
2020 and 2021—yes, the pandemic years!—were growing years for us. I attribute that to the sowing year, 2019, when we got every product in our store into our inventory system.
Doing so set us up for success when the pandemic hit. We were able to sell easily online and capitalized on a situation we could never have anticipated.
Exploding years involve BIG growth, usually more than 25%.
The year 2018 was an explosive one at our store. It was the year after I left my full-time career, so I was able to invest a lot of my effort into the store. We doubled revenue from the prior year.
What Savvy Shopkeeper’s Retail Business Forecasting Looks Like For 2024
In 2023, I knew Savvy Shopkeeper would most likely have a “sowing” year. I knew I would be investing time into several big projects—one of which was the first virtual conference, and another, which I’ll be sharing about in the next episode of the podcast.
Large projects require a lot of time investment. I also onboarded two new team members and had quite a bit of administrative cleanup, including finally setting up Google Workspace for Savvy Shopkeeper.
This doesn’t include other aspects or all of the unanticipated stuff that came up in my personal life. 2023 was a year, let me tell ya!
As I reflect on this past year and look ahead to 2024, I anticipate a growing year for Savvy Shopkeeper. I’m confident I’ll skip the inching year because I set myself up for growth with everything I did in 2023. Even though so much of the work wasn’t exciting (and sometimes boring and grueling!), I’m so looking forward to what 2024 has in store.
And if I look further into future years, I have an exploding year on my horizon. I can’t quite share why I think this yet—I’d have to share too many secrets! Our Master Shopkeepers Group Ambassador and Call Moderator, Kate, would love that. She always wants me to spill the tea.
Start Your Retail Business Forecast For the Upcoming Year
Want to use the framework I’ve shared to do your retail business forecasting? Here are the steps again:
1. Write down the high view of 2024 for you and your business. Use a calendar so you can see everything visually. This will help reduce overwhelm and show you where you might be overextending or double-booking big projects.
2. Reflect on your high-level view and determine which kind of year you can expect. With the insight you’ve gained from looking at all the moving parts and projects you’re planning in 2024, you’ll get an idea of what kind of year you’ll have: sowing, inching, growing, or exploding.
3. Leave room for your prediction to change. Of course, things can change! Life throws all sorts of things at us, which is why we’re forecasting rather than writing it in stone.
I know that many of us want GROWTH. BIG growth! But what lies ahead for you personally and/or professionally may not allow for that. And that’s okay! My examples show that not every year involved “exploding” growth.
I am realistic about my life, circumstances, and time, especially WHERE and HOW I will spend my time. You can listen to episodes 110 and 135 for more details on how I manage my mind around time and how I get everything done.
How We’re Continuing This Conversation in Master Shopkeepers
On December 18th, members of Master Shopkeepers can join the Reflections + Goal Setting Group Call, where I will ask all of you a series of questions to help you look ahead and plan for 2024. This will be quiet and calm. You’ll have the opportunity to journal, think, and do the type of work we don’t often gift ourselves time for.
Members can also take their goal-setting one step further with the BFP (Budgeting, Forecasting, Planning) Tool. It’s a Google Sheet that walks you through your numbers, a little thought work, and some goal setting. There’s also a video replay of the masterclass where I showed members how to use this tool in the Shopkeepers Lab.
I never know what the new year will bring. But I do know I have the power and strength to manage whatever comes my way. And that’s true for you, too—as long as you’re willing to do the data tracking, financial review, and mindset work to keep you and your business on track.
*Please note that some of the links above are affiliate links or referral codes, and at no additional cost to you, I will earn a commission if you decide to make a purchase after clicking through the link or using the code. I make recommendations because I genuinely believe they are useful to shopkeepers. Please do not spend any money on these products unless you feel you need them or that they will help you achieve your goals.
- [02:16] What is Retail Business Forecasting?
- [02:56] The First Step of Retail Business Forecasting: Looking Ahead to 2024
- [07:55] How to Categorize Your Anticipated Retail Growth
- [11:35] What Savvy Shopkeeper’s Retail Business Forecasting Looks Like For 2024
- [14:49] Start Your Retail Business Forecast For the Upcoming Year
Connect With Kathy
Kathy Cruz is a brick and mortar store owner and retail coach. She helps shopkeepers work less, profit more, and grow their brick and mortar businesses through her podcast, quiz, and retail coaching mastermind.
Website: www.savvyshopkeeper.com | Instagram: @savvyshopkeeper