Agile Reforecasting

I'm speaking at the Just Curious AI Agency Accelerator on July 16th, sharing the practical "jigs" and operational strategies that help agencies move from AI experiments to predictable business impact. Only 8 spots left for this intimate, virtual event with senior agency leaders; grab your seat here. Use code JUSTIN10 for 10% off registration.

-justin

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It's the last week of June, and you're staring at a spreadsheet that tells two conflicting stories.

Your January budget projected 15% growth for the year. But H1 actual results show you're either crushing those projections by 25% or trailing them by 20%. Either way, your H2 plan—built on assumptions that no longer match reality—is about to lead you astray.

Welcome to mid-year re-forecasting season, when smart businesses pause to ask: "Given what we now know, how should we spend the next six months?"

Most SMBs treat their annual budget like scripture. Sacred, unchangeable, and referenced quarterly with resigned acceptance. But unless you somehow managed to acquire a working crystal ball, sticking to January's assumptions in July is like using last year's weather forecast to plan tomorrow's picnic.

The good news? The same AI-powered forecasting approach we covered in Issue #2 on cash flow forecasting can transform your mid-year re-forecast from a dreaded spreadsheet exercise into a strategic advantage that positions you to dominate H2.

Here's how.

Step 1:
Analyze What Actually Happened in H1

Before you can intelligently plan H2, you need to understand why H1 unfolded the way it did. This isn't just about comparing budget vs. actual, it's about extracting the underlying patterns that will inform your next six months.

Start by gathering your H1 data:
- Monthly P&L statements (actual vs. budget)
- Cash flow statements 
- Customer acquisition and retention metrics
- Sales pipeline and conversion data
- Major expense variations and their causes
- Any external factors that impacted performance

If you built a Cash Flow Advisor jig from Issue #2, you can use it for this analysis. If not, create a Mid-Year Strategic Analyst jig specifically designed for comprehensive business analysis.

Fire up a new GPT (ChatGPT), Project (Claude), or Gem (Gemini) with these custom instructions (only if you haven't already made a Cash Flow Advisor):

You are my Mid-Year Strategic Analyst. Your purpose is to help me analyze H1 performance and create data-driven forecasts for H2 that optimize for both growth and cash flow.

BUSINESS CONTEXT:
[Brief description of your business, customer base, and key revenue/cost drivers]

When analyzing H1 performance:
1. Identify variances between budget and actual results
2. Diagnose underlying causes of major variances
3. Assess whether variations represent trends or one-time events
4. Evaluate the impact of external factors (market, competition, seasonality)
5. Highlight unexpected insights that might inform H2 strategy

When forecasting H2:
1. Project realistic scenarios based on H1 learnings
2. Identify key assumptions and test their validity
3. Recommend strategic adjustments for H2
4. Flag potential risks and opportunities
5. Suggest specific actions to optimize performance

ANALYSIS FRAMEWORK:
- Revenue Analysis: Customer acquisition, retention, pricing effectiveness
- Cost Management: Fixed vs. variable cost trends, efficiency improvements
- Cash Flow Optimization: Working capital management, payment timing
- Competitive Positioning: Market share trends, competitive responses
- Operational Efficiency: Key metrics that drive profitability

FORMAT:
- Executive Summary: Top 3 insights and recommended H2 adjustments
- Detailed Analysis: Supporting data and reasoning
- H2 Forecast: Base, optimistic, and conservative scenarios
- Action Plan: Specific initiatives with timelines and success metrics
- Risk Assessment: Key factors that could derail H2 plans

Always focus on actionable insights that can immediately improve H2 performance.

Upload your H1 financial data, customer metrics, and any relevant market research to give your jig the context it needs.

Now prompt your jig with something like:

Analyze our H1 performance vs. budget and identify:
1. Our biggest positive and negative variances and their root causes
2. Which trends from H1 are likely to continue into H2
3. What external factors significantly impacted our performance
4. Which of our January assumptions proved wrong and need updating
5. What our H1 results reveal about our competitive position

Use this analysis to recommend how we should adjust our H2 strategy.

This analysis often reveals surprising insights. Maybe your 20% revenue miss was actually due to delayed sales cycles, meaning H2 could see a surge. Or perhaps your cost overruns were driven by one-time efficiency investments that will pay dividends in H2.

Step 2:
Build Multiple H2 Scenarios

Unlike annual budgeting, where you might create one optimistic forecast, mid-year re-forecasting should embrace uncertainty. You have six months of real data to work with, but you also have six months of unknowns ahead.

Use your Mid-Year Strategic Analyst to model different H2 scenarios:

Based on our H1 analysis, create three H2 scenarios:

BASE CASE: Most likely outcome given current trends
- Assumes H1 trends continue with minor variations
- Incorporates known external factors (seasonality, market conditions)
- Reflects realistic capacity and resource constraints

OPTIMISTIC CASE: What happens if key opportunities materialize
- Assumes we successfully execute 2-3 strategic initiatives
- Includes potential upside from pipeline or market expansion
- Factors in operational improvements from H1 learnings

CONSERVATIVE CASE: Downside protection planning
- Assumes challenging external conditions (economic headwinds, increased competition)
- Plans for potential loss of major customers or revenue sources
- Includes cost structure flexibility for various revenue levels

For each scenario, provide:
- Monthly revenue and expense forecasts
- Cash flow implications and working capital needs
- Key performance indicators and milestone tracking
- Resource allocation recommendations
- Contingency triggers and response plans

This scenario approach transforms forecasting from fortune-telling into strategic planning. You're not trying to predict the future perfectly—you're preparing to respond effectively to different versions of it.

Step 3:
Integrate Competitive Intelligence

Your H2 forecast can't exist in a vacuum. The competitive landscape you operated in during H1 may have shifted dramatically, and those changes will impact your H2 performance.

If you built a Competitive Intelligence jig from Issue #13, now is the perfect time to leverage it. If not, ask your Mid-Year Strategic Analyst to incorporate competitive factors:

Incorporate competitive intelligence into our H2 scenarios:

1. How have our key competitors evolved during H1?
2. What new competitive threats or advantages have emerged?
3. How might competitor actions impact our H2 performance?
4. What market opportunities might competitors miss that we could capture?
5. How should competitive dynamics influence our H2 resource allocation?

Based on this analysis, adjust our three H2 scenarios to reflect competitive realities.

This integration often reveals strategic opportunities. Maybe a competitor's stumble in H1 opens market share opportunities for your H2. Or perhaps new competitive threats mean you need to accelerate certain initiatives you'd planned for 2026.

Step 4:
Optimize Your H2 Strategy

Now comes the strategic magic: using AI to identify the highest-impact adjustments you can make for H2. This isn't about tweaking numbers—it's about optimizing your entire approach based on real learning.

Ask your jig:

Based on our H1 analysis and H2 scenarios, recommend specific strategic adjustments:

REVENUE OPTIMIZATION:
- Which customer segments or products should we prioritize in H2?
- What pricing or packaging changes could improve H2 performance?
- Which sales/marketing initiatives from H1 should we double down on or abandon?

COST OPTIMIZATION:
- Which H1 cost overruns were investments that will pay off in H2?
- What cost structure changes would improve our H2 flexibility?
- Which planned H2 expenses should we accelerate, delay, or eliminate?

CASH FLOW MANAGEMENT:
- How should our H1 cash performance change our H2 working capital strategy?
- What payment terms or collection improvements could optimize H2 cash flow?
- Which H2 investments will have the best cash-on-cash returns?

OPERATIONAL FOCUS:
- Which operational improvements from H1 should we scale in H2?
- What new capabilities do we need to build for H2 success?
- How should we reallocate resources based on H1 learnings?

Provide specific recommendations with expected impact and implementation timelines.

This analysis transforms your re-forecast from a financial exercise into a strategic realignment. You're not just updating numbers—you're optimizing your entire H2 approach based on real market feedback.

Step 5:
Create Your H2 Action Plan

A forecast without an action plan is just an expensive guess. Your AI can help translate insights into specific, measurable initiatives that will drive H2 performance.

Try this prompt:

Convert our H2 strategic recommendations into a comprehensive action plan:

For each recommendation, provide:
1. Specific action steps with clear deadlines
2. Resource requirements (people, budget, tools)
3. Success metrics and tracking methods
4. Dependencies and potential roadblocks
5. Contingency plans if initial approaches don't work

Organize the plan by:
- Quick wins (impact within 30 days)
- Medium-term initiatives (60-90 day impact)
- Strategic investments (H2-long payoffs)

Include a monthly review schedule to track progress and adjust tactics based on results.

Your AI will generate a roadmap that connects your H1 learnings directly to H2 actions. This ensures your re-forecast drives real behavior change, not just updated spreadsheets.

Step 6:

Build a Continuous Monitoring System

The final step is establishing systems to track your H2 performance against your new forecasts and adjust course as needed. Unlike annual budgets that get reviewed quarterly, your H2 re-forecast should be a living document.

Set up a monthly monitoring rhythm:

Week 1 of each month: Review previous month's actual vs. forecast
Week 2: Update rolling 90-day cash flow projections  
Week 3: Assess competitive developments and market changes
Week 4: Adjust H2 tactics based on new information

Ask your jig to create monitoring templates:

Create a monthly H2 performance monitoring system:

1. Key metrics dashboard with variance analysis
2. Cash flow projection updates incorporating new data
3. Competitive intelligence check-ins and impact assessment
4. Strategic initiative progress tracking with course correction triggers
5. Scenario planning updates based on emerging trends

Include specific triggers that would prompt tactical adjustments or strategic pivots.

Note that this is an actively evolving space for generative AI... many of the leading frontier models are experimenting with automatic triggers based on time or conditions. It's likely that in the coming months you'll be able to automatically intitiative much of what's covered in this final step. 

Transform H2 from Survival to Strategy

Mid-year re-forecasting isn't just about updating your numbers, it's about transforming the way you navigate uncertainty. By combining H1 learnings with AI-powered scenario planning, you move from reactive business management to proactive strategic optimization.

The businesses that will thrive in H2 aren't those with the most accurate January forecasts. They're the ones that learn fastest from H1 reality and adapt most intelligently for H2 opportunity.

Your H1 performance, whether ahead or behind plan, contains the seeds of H2 success. The question is whether you'll extract those insights and act on them, or whether you'll spend another six months flying blind with outdated assumptions.

The tools are here. The data is fresh. Time to make H2 your strategic advantage.

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If you have ideas for future newsletters, I'd love to hear them.