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  • Sales forecasting
    It may sound complicated and it may even look complicated on paper, but forecasting the sales of your business is not nearly as difficult as most people seem to think. You may surprise yourself with your ability to forecast your own sales with a rather accurate guess. Although forecasting your sales does require a good working knowledge of your business, it truly is more of an art than a science. Do not worry about not having a degree in economics or advanced maths; it simply is not necessary. The only thing that is essential is that you make the effort to do a proper forecast. If you are able to run a business, then you are able to make a forecast. Most business owners are able to predict their own company’s sales better than an expert is, simply because experience counts for more than any statistical data or analysis. How to forecast To begin a forecast you will want to break down the sales you have already had into smaller, manageable parts. This will make it easier to forecast the individual sections of your business. You can, with a great degree of accuracy, assess your potential future sales based on the lines sold from one month to another. When you have completed the figures for the individual months, simply add up totals for the required forecasting period. Break your sales down into manageable sections and then forecast the sections. Estimate your sales by product line, month to month, then add up all the lines and all the months. Once you are finished you should have a simple sales forecast that details the projected prices and costs, which will determine the total value of each category of your business. An example for ecommerce can be as follows; 1. Number of visitors to the site 2. Forecast % to buyers 3. Number of Avg items in the basket 4. Avg price of each good 5. Total Gross sales If you want to further explain your forecast, it is important to use text. By using text, you will be able to explain your related plans and background. You can also enhance these forecasts with tables and charts, including text to provide clear explanations. The same applies to any business plan you have in mind. It is important that a complete business plan includes details such as text discussions, sales programmes, sales strategies and of course, a sales forecast, along with any additionally related information. All this information should be accompanied by tables and charts to provide visual variety and ease of readability. These tables and charts should be located next to their corresponding text. As you go along and your business grows, you can easily change your strategy and implementation to fit any structure and logic you need in order to increase and forecast sales. About sales strategies Your sales strategy is the area of your business that deals with when and how to close potential sales prospects as well as how to compensate sales people. This area will also detail how you can optimise database management and order processing. The information provided includes price, delivery and other conditions related to sales. Here you can explain how you plan to sell your products or services. Will you sell through discount, wholesale, phone order, mail order or retail? How will you train your sales people and how will you maintain your sales force? There is a fine line between your sales strategy and your marketing strategy, so it is important not to confuse them. Your marketing strategy should be about the broader aspects of generating sales leads, while sales marketing covers the efforts required to bring those sales leads into actual transactions. Marketing is more about image and awareness, while sales is about securing orders. Sales forecast The details in your sales forecast should both highlight and summarise all the numbers you have entered into your sales forecast table. This is the time to emphasise details and background information, as well as anticipate the potential questions people will ask. Sales programmes Since details are so important, use your sales programme to implement any specific information you feel is relevant to achieving success in your business. Here you will want to point out the responsibility of each person’s role in accomplishing this success. Most business owners use sales forecasts to predict their company’s profitability over the next 12 months, followed by an annual sales plan for the upcoming three years. Experience shows that anything forecast for longer than one year ahead often does not pay off. This is the time to make your business plan shine. Make sure you highlight your business goals, results and how you intend to achieve them; include anything else that you feel is relevant in order to make your business plan more believable.
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