What is Sales Forecasting in baby steps
Sales Forecasting is success
Sales Forecasting is an integral element to the success of any business model. Just as a trip abroad without planning could lead to hidden dangers, a business venture without sales forecasting will certainly lead to unknown territory with plenty of surprises around every corner.
Sales forecasting is an indication
In essence sales forecasting gives business planners an indication of what the coming year’s revenues and expenditure are likely to be. Because sales forecasting is based on conjecture, it can be loaded with loopholes so it is up to business planners to aim to make forecasts as accurate as possible.
There are a number of ways to do this and most depend on the quality of source information. Competitors, trade suppliers, trade associations, trade publications and trade directories are all good places to start to give an overall view of how business in a given sector is performing.
Sales Forecasting: Who is Your Customer?
Once industry trends have been identified, the Sales forecasting process should then look at what’s going on with that industry’s customers. Draw up a customer profile. The key here is to identify who the company’s core customer is and to identify trends relative to that customer.
Sales Forecasting: Where is Your Trading Zone?
Also key to a good Sales forecasting plan is to clearly identify your trading zone. Establish both its size and location. Familiarize yourself with all the characteristics of this trading zone for example how many of potential customer are located with this area; how far are they from your business; how accessible is your business to them and so forth.
Sales Forecasting: Know Your Competition
Particularly for start-up businesses, competitors provide a wealth of information. No business can ever know too much about its competitors and their activities. Start by drawing up profiles on the key competitors, profiling their location, customers, quality of service or product, production standards, distribution reach and methods, product positioning and promotional campaigns. Most important of all, analyse their pricing strategies and potential revenues.
Sales Forecasting: Monthly Revenue Estimates
Once a clear idea of competitor activities has been devised, it is possible to pick a competitor that is closest in size to your business and use their statistics to gauge revenues on a monthly basis. For a start-up business, it is advisable to reduce projected earnings by 50%.
Without question, Sales forecasting is a lengthy and involved process. You can make it easier on yourself by contacting a member of our team today and availing of our free sales forecasting demo software package.
