The Power of Sales Forecasts
Forecasting our sales provides two important elements for running a successful business:
It is best to be conservative in your sales estimates, to avoid surprises and cash flow difficulties – anything above that is a bonus; and it is harder than you think to get customers when you’re new. As well, if you predict lofty targets and then don’t meet them, you not only put your business in jeopardy but also bring yourself disappointment.
It is not possible to predict the future with certainty; however, following some rules of thumb, combined with what your research reveals about your industry and your competitors will fill the gap between “no information” and “complete certainty”. You end up with a realistic estimate that pushes you to make sales in your business.
It is hard to predict sales when you are new in business and have no customers or clients yet. However, there are some formulas and data you can use to predict the sales in your sector and industry.
In this lesson, we will determine the following for Year 1:
Download the Forecast Reports worksheet to determine all the forecasts mentioned above. Fill in the spaces when prompted.
Note: Feel free to set this up in an Excel spreadsheet with formulas if you are comfortable with that software.
Download Jake’s forecast reports and refer to them as you go through each of the steps in this lesson.