Last January, I was looking forward to a new year and a new decade. Businesses were booming, industries were expanding… there were so many possibilities. Of course, what we ended up with was a global pandemic, wildfires, impeachment, sensational blind dating shows, the cancelation and revival of sports, the failure of Quibi, the rise (and fall?) of TikTok in the United States, and so much more.
It’s been a devastating year for businesses, plain and simple. Hundreds of thousands of businesses have shut down permanently. With brick-and-mortar stores closed, businesses that remained afloat saw customers shift to online shopping. This presents new opportunities—and new problems. Wholesale accounts have experienced significant supply chain disruption, forcing changes in buying behavior. The impact of the pandemic has not been felt equally across industries. Most importantly, consumers’ needs have changed, which means businesses must change with them.
Since March, 55% of businesses that closed on Yelp have closed for good.
"Some 26,119 shopping and retail businesses are also still closed, of which roughly half (or 12,454) are permanent — which is up 29% from what Yelp reported last month."
With all this turbulence, revenue forecasting matters more than ever. To bring much-needed clarity to an uncertain future, I created this simple tool for Part and Sum’s clients. Start by specifying your level of optimism or pessimism. Next, input your ecommerce revenues from the past six quarters. The calculator will determine the YoY change over the past two quarters, factor in your outlook, and predict your Q3 and Q4 ecomm revenues using a weighted average of your YoY revenue change.
If applicable, repeat the calculations with retail and wholesale revenues. It’s important to know what percentage of total revenue is coming through each sales channel (ecommerce, retail, and wholesale), and how that compares to your breakout for 2019. Has total revenue increased or decreased YoY? Which sales channels are seeing growth or contraction? Does the contraction in certain channels outweigh the growth in other channels?
A recent Deloitte report provides general outlooks for different industries. Use this list as a starting point, but remember, you know your business best.
Very Optimistic: Pharmacies, Groceries, Discount stores
Optimistic: Tech and telecom, Digital entertainment
Pessimistic: Consumer wholesale, Financial institutions and services
Very Pessimistic: Travel, hospitality, and wellness, Apparel and luxury goods, Oil, gas, chemicals, and special materials, Live entertainment
Drop in your gross revenue from the last 6 quarters, then play with sentiment to see different predictions for 2020.
Revenue - Previous Quarter (1)
Revenue - Previous Quarter (2)
Revenue- Previous Quarter (3)