2023 is coming to an end. How are your sales figures looking? Were you able to hit your goals for the year? With the economy slowing down and heading toward a recession for 2024, you may think you are already feeling the effects from it. However, missing your sales targets for this year does not necessarily mean you are already in the recession. So, what else could be causing your business to miss its targets? Here are three scenarios that could explain why your business underperformed this year.
Overly Lofty Sales Goals and Expectations
What kind of resources did you and your team use when setting your sales expectations for this year? Whether based on the success from years past or excitement for what a new year could bring, it is possible that your team set overly lofty of expectations due to inaccurate insights.
Thousands of businesses utilize our sales forecasts, which include inventory and supply chain management insights to help you understand how your business should be performing, as well as whether you are really hitting the targets that matter most to the success of your business.
[ Further Reading: Best Business Strategies for 2024 During the Economic Recession ]
Inflated Sales Numbers From the Pandemic
After the height of the COVID-19 shutdowns in 2020, many companies and industries saw their sales and profits soar due to incredible demand coming out of the pandemic. One of the best examples of this kind of surge in sales is Peloton, a maker of exercise bikes and workout equipment. Due in part to effective marketing campaigns, Peloton caught lightning in a bottle – many people were spending much more time at home but still wanted to continue to exercise and stay healthy. Your company might have had a similar boost in sales coming out of the pandemic, and your sales may appear to be suffering now as they normalize back to pre-pandemic trajectories.
Feeling the Ups and Downs of the Economy
Economic trends will often have a much greater impact on individual businesses than the economic variation would suggest. Imagine the economy as a huge ship out at sea and businesses like yours as smaller speed boats. As economic trends come and go like gusts of wind, your boat could easily be pushed off course, while it would take an enormous gust of wind to have a significant effect on the larger ship, i.e., the economy as a whole.
Not all industries are impacted by the effects of economic growth or decline at the same time either. Imagine each row of seats on a rollercoaster as a different industry. The passengers in the front of the rollercoaster will experience the big drop on the ride first, and the passengers in the back will experience it later. This same concept applies to different industries, as they move through different stages of the business cycle at different times.
Without reliable data and goals set in place, you will never know exactly how well your business should be performing, or how it is truly performing relative to the right metrics. Recessions are often difficult for any company to navigate through, but ITR Economics can provide your team with the reliable insights you need to prepare your company for the future. If you need help getting your business on the right track to hit your sales goals for 2024 and beyond, contact us today!
