Your sales strategy, past sales performance and expectations of economic and market changes are parts of effective sales forecasting.
Sales forecasting allows companies to predict future performance. By focusing on sales forecasting, you’re able to plan for coming business demands and have adequate resources in place. Generally speaking, companies that use sales forecasting strategies have higher performance levels than those that don’t.
Existing companies aren’t the only businesses to benefit from sales forecasting ─ entrepreneurs also use this technique to attract investors. This allows prospective investors to better evaluate and assess the company to determine whether financing is a good business opportunity.
Developing an accurate sales forecast can alert you to potential adjustments needed in your supply chain or inventory so you’re prepared for a bump in business or let you adjust ordering if a slump is coming. A forecast can let you shift staffing or provide insight into your cash flow needs.
To obtain the most precise predictions in a sales forecast, it’s important to base predictions on more than just the previous quarter’s numbers. Thoroughly examine these principles of sales forecasts when creating one for your company:
When it comes to creating the most accurate sales forecasts for your business, there is certainly no one-size-fits-all method. It’s important to take individual factors that make your business unique into consideration when choosing the most appropriate technique. While the actual calculations can be quite simple, making sure you have the most accurate records is vital. Without accurate information, any sales forecast can be skewed. Two common frameworks to begin sales forecasting are:
These are two basic forecasts but they are only a framework. Detail can come through other factors that you may want to consider.
There could be expectations of changes in your market or forecasts of changing economic conditions for consumers. Weigh the prospect of bringing in new customers during the forecast period as well as the possibility of losing contracts or customers. Changes in political conditions such as an election or new administration could severely impact companies that rely on government contracts. Your competition could weaken or become stronger.
Use sales forecasting to create accurate predictions for your business to ensure you’re fully equipped to meet business demands. Incorporating this important step into your planning process allows you to make specific calculations that your organization can rely on.
Adding to your education through a certificate in advanced professional sales and sales management with courses such as expert selling and expert sales management can help you learn how to direct a sales force and develop the knowledge to reach your peak potential.
Being a national sales manager for a top-tier company has given me a great deal of experience in working with colleagues and customers. The Expert Selling course has given me even more weapons to get goals and objectives done. One of the many things I learned was "keep It simple." The business world has become very impersonal. The email maze has taken away much of the personal contact we had with customers and our own colleagues. Emails should be short and sweet, not novels. Another key learning was to let the customers know exactly what your services can deliver, and what need your product will fulfill. The instructors at the University of San Francisco were all great and really knew their topics and discussion points. Good luck to all, and I will see you in the “sales arena”!
West Chester, PA