Forecasting in professional services is a highwire act. One misstep, and you’re in free fall.

In many industries, forecasting is all about revenue growth—demand planning. Companies pour resources into projecting sales, chasing growth, and capturing market share. And this is super important.

But... in labor-intensive businesses, that’s only half the story. In businesses where people are the product—like consulting, audit, and law firms—forecasting gets trickier.

People are your "inventory," and the supply chain is messy! Recruiting, hiring, retaining.

You’re competing in two markets:

• The services you sell (demand).

• The employees you hire (supply).

Both sides matter. But the constraining factor shifts depending on the year:

• Some years, hiring is manageable. Demand-side forecasting dominates: How can we drive business development and maximize growth?

• Other years, the dynamic flips. Remember 2021? Labor markets were chaos. People became the bottleneck. Firms couldn’t hire fast enough, making supply-side planning critical.

Focus too much on demand during a supply crunch? You're either going to miss your goals, or you're going to burn your people out. Neither is a good option.

The takeaway: Forecast both supply and demand. Know which side constrains your growth.

While professional services may be an extreme example, this dual-market dynamic applies across industries where labor, materials, or capacity are bottlenecks.

If you want a realistic, resilient forecast, you must identify your bottleneck first.