Financial Forecasting lessons learnt from the Winter Olympics

Inspired by the Winter Olympics I admire the dedication and the commitment that has made the athletes Olympians. Devoting everything to the pursuit of a four year goal, the outcome of which can be determined in split seconds. Watching the Women’s Ski Aerials last night, as Lydia Lassila said: “They don’t just hand out medals- you have to earn it”.

And that’s about:

having a goal,

having a plan to reach that goal,

having milestones to measure up against,

picking yourself up and having another go when you fall down,

having the right support around you to coach you, give you feedback and encouragement and keep you on track,

making some sacrifices to prioritise what matters most, and

being flexible to adjust to the surrounding conditions and circumstances.

Is that any different from being successful in business?

We all need the structure of a planned approach to be successful in our chosen fields.

I was chatting to a young man last week who started his own business only nine months ago, and within the first six months he had to treble his financial target for the year. I was so impressed with his measured, and well thought out strategy, and action plan to develop his business – not just for year one, but for years three to five. I have no doubt he will go on to be incredibly successful.

In the current climate of uncertainty having a Plan A, B and C helps us build some resilience into our business. And whilst it may seem like the ground is moving under our feet, it’s not an excuse not to plan. In fact, it’s a reason to get even more serious about planning.

Laura Peel and Danielle Scott have more than the ground moving under their feet. Training for the many and varied scenarios that mother nature can throw at them with variable weather and snow conditions, in addition to the physical, technical and mental skills required to execute aerial skiiing is just mind boggling. How do they do it- they plan and execute and continuously take clues from their surroundings to tweek the plan.

So what can we learn from these amazing athletes to apply to financial planning within our businesses.

How to Create a Financial Forecast

A few analogies to apply to financial forecasting:

Get constant feedback – keep your financial forecast updated for your results year to date.

Adapt for changing circumstances – review and revise your financial forecast regularly for the big things that you know have changed or are likely to happen; like supplier price increases, wage and superannuation increases. eg: In this market of escalating prices, construction companies are revising their forecasts weekly.

Be realistic with your expectations. Bullshit budgeting is a waste of everyones’ time. Adopt the concept of the “Bankers” Budget being the budget that you have 80% chance of achieving.

Make informed decisions based on what your forecast is telling you. And that could be great, we can afford to award that pay rise or employ another staff member, or it could be we need to trim in a couple of areas, or adopt Plan C.

Keep looking and planning ahead, and that gives us a much better chance of navigating some obstacles and optimising our performance.

Our Australian female aerialists unfortunately did not kick their ultimate goal of medalling at the Winter Olympics last night, but the only reason they are Olympians is because they had a vision, made a plan and committed to that plan.

Debbie Millard is the friendly face of finance. Debbie prides herself on being a people person that happens to do numbers; supporting non-financial leaders and business owners on their journey to make friends with the numbers in their business. Building the foundations for informed decisions resulting in a resilient business.

Debbie has 30 years’ experience across professional practice , large entrepreneurial private business and not-for-profit organisations in executive and non-executive roles. An Oxford graduate, Chartered Accountant, Graduate Australian Institute Company Directors, Telstra Business Women’s Award Finalist and Associate Certified Coach.