You're forecasting for business growth and hit unexpected costs. How do you handle the surprise?
Encountering surprise expenses while forecasting for business growth can be daunting, but with a few strategic moves, you can manage the situation effectively. Here's how to handle these unexpected costs:
How do you handle unexpected costs in your business growth plans? Share your strategies.
You're forecasting for business growth and hit unexpected costs. How do you handle the surprise?
Encountering surprise expenses while forecasting for business growth can be daunting, but with a few strategic moves, you can manage the situation effectively. Here's how to handle these unexpected costs:
How do you handle unexpected costs in your business growth plans? Share your strategies.
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My first question when hit with unexpected costs is why have they arisen? Was it poor forecasting? Was it poor operational performance? Was there a change in scope in the job/project? The answer is vital as it determines the approach. You must understand why. if it is poor forecasting, understand what wrong assumptions were made and change them going forward. If it was poor operational performance, discuss with the team, educate and train to avoid repetition, or change the people. if it was a change in scope, there should be an opportunity to charge more and send an invoice, although this should have bene agreed in advance. Once understood, the impact on cash and funding must be understood and addressed. Learn from surprises - make changes.
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When faced with unexpected costs during business growth forecasting, the first step is to assess their impact and determine how they affect your financial projections. Review and adjust the assumptions in your forecast to ensure it reflects the new reality. Prioritizing expenses becomes crucial; identify areas where costs can be reduced or deferred without compromising critical operations. Communicate transparently with stakeholders about the situation, outlining the changes needed and the rationale behind them. . Additionally, explore ways to optimize resources or find alternative solutions to mitigate the cost impact. Finally, update the forecast to align with the revised financial landscape.
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Unexpected costs are a part of the dynamic business environment, and the key lies in proactive financial agility. When faced with unforeseen expenses during a capacity planning project, I leaned on the foundational principle of expecting the unexpected. For instance, while leading financial oversight for a healthcare client at Legato, an unanticipated vendor pricing change risked derailing the project's profitability. By quickly assessing our financial buffer, reallocating underutilized resources, and collaborating across teams, we mitigated the impact without compromising on deliverables. Regular scenario planning and leveraging tools like Power BI to model 'what-if' scenarios were instrumental in navigating this challenge.
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