Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/a26f9f83/public_html/articles/includes/config.php on line 159
Sales Forecasting For New Businesses > NetSparsh - Viral Content you Love & Share

Sales Forecasting For New Businesses

Sales forecasting is the process of organizing and analysing information in a way that makes it possible to estimate what your sales will be. This Micro Module outlines some simple methods of forecasting sales using easy to find data. Books containing simple and sophisticated techniques of forecasting sales can be found in libraries and business oriented book stores.

If you sell more than one type of product or service, prepare a separate sales forecast for each service or product group.

There are many sources of information to assist with your sales forecast. Some key sources are: Competitors; Neighbouring Businesses; Trade suppliers; Downtown business associations Trade associations; Trade publications; Trade directories;

Factors that can affect Sales can be divided into external and internal influences. Examples of these are:

External:
Seasons; Holidays; Special Events; Competition, direct or indirect Competition, External labour events; Productivity changes Family formations; Births and deaths; Fashions or styles; Population changes; Consumer earnings; Political events Weather

Internal:
Product changes, style, quality; Service changes, type, quality; Shortages, production capability; Promotional effort changes Sales Motivation plans; Price changes; Shortages, inventory; Shortages/working capital; Distribution methods used Credit policy changes; Labour Problems

Creating a sales forecast can be divided into four steps.

Step 1
Develop a customer profile and determine the trends in your industry.

Make some basic assumptions about the customers in your target market. Experienced business people will tell you that a good rule of thumb is that 20% of your customers account for 80% of your sales. If you can identify this 20% you can begin to develop a profile of your principal markets.

Sample customer profiles:
male, ages 20-34, professional, middle income, fitness conscious.

Young families, parents 25 to 39, middle income, home owners.

Small to medium sized magazine and book publishers with sales from $500,000 to $2,000,000

Determine trends by talking to trade suppliers about what is selling well and what is not. Check out recent copies of your industry's trade magazines. Search the Business Periodicals Index (found in larger libraries) for articles related to your type of business.

Question: What are five customer profiles for your business?

Question: What are some customer trends for your customers/clients?

Step 2
Look at the area where you will be trading

Establish the approximate size and location of your planned trading area.

Use available statistics to determine the general characteristics of this area.

Use local sources to determine unique characteristics about your trading area.

How far will your average customer travel to buy from your shop? Where do you intend to distribute or promote your product? This is your trading area.

Estimating the number of individuals or households can be done with little difficulty using national census data to be found at your library or town hall. Your local statistics office or chamber of commerce can identify what the average household spends on goods and services.

Neighbourhood business owners, the local Chamber of Commerce, the Government Agent and the community newspaper are some sources that can give you insight into unique characteristics of your area.

Question: What are the statistics on the people in your area?

Step 3
List and profile competitors selling in your trading area.

Refer back to the data you collected in your market research.

Get out on the street and study your competitors. Visit their stores or the locations where their product is offered. Analyse the location, customer volumes, traffic patterns, hours of operation, busy periods, prices, quality of their goods and services, product lines carried, promotional techniques, positioning, product catalogues and other handouts. If feasible, talk to customers and sales staff.

Step 4
Use your research to estimate your sales on a monthly basis for your first year.

The basis for your sales forecast could be the average monthly sales of a similar-sized competitor's operations that are operating in a similar market. It is recommended that you make adjustments for this year¹s predicted trend for the industry.

Be sure to reduce your figures by a start-up year factor of about 50% a month for the start-up months.

Consider how well your competition satisfies the needs of potential customers in your trading area. Determine how you fit in to this picture and what niche you plan to fill. Will you offer a better location, convenience, a better price, later hours, better quality, and better service?

Consider population and economic growth in your trading area. Using your research, make an educated guess at your market share. If possible, express this as the number of customers you can hope to attract. You may want to keep it conservative and reduce your figure by approximately 15%.

Prepare sales estimates month by month. Be sure to assess how seasonal your business is and consider your start up months.

Further tips
Sales revenues from the same month in the previous year make a good base for predicting sales for that month in the succeeding year. For example, if the trend forecasters in the economy and the industry predict a general growth of 4% for the next year, it will be entirely acceptable for you to show each month¹s projected sales at 4% higher than your actual sales the previous year.

Credible forecasts can come from those who have the actual customer contact. Get the salespersons most closely associated with a particular product line, service, market or territory to give their best estimates. Experience has proven the grass roots forecasts can be surprisingly accurate.

Sales Forecasting and the Business Plan summarize the data after it has been reviewed and revised. The summary will form a part of your business plan. The sales forecast for the first year should be monthly, while the forecast for the next two years could be expressed as a quarterly figure. Get a second opinion. Have the forecast checked by someone else familiar with your line of business. Show them the factors you have considered and explain why you think the figures are realistic. Your skills at forecasting will improve with experience particularly if you treat it as a "live" forecast. Review your forecast monthly, insert your actual, and revise the forecast if you see any significant discrepancy that cannot be explained in terms of a one-time only situation. In this manner, your forecasting technique will rapidly improve and your forecast will become increasingly accurate.

Ben Botes is an author, entrepreneur and expert speaker on new venture creation. He is also the founder of http://www.my1stbusiness.com a web portal for 1st time business owners and entrepreneurs. Visit my1stbusiness.com today for the most extensive range of small business resources, courses, articles and tools, designed to unleash your entrepreneurial spirit.

In The News:

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news

Forbes

How Sales Managers Secretly Sabotage Revenue
Forbes
Into Obscurity. If you're like most business leaders, you invest heavily in your sales force. In fact, if you add up all the money you spend on training, incentives and technology, you might be alarmed at the size of your ongoing investment in improved ...


Enterprise Irregulars (blog)

How To Sales Manage Upside and Unlikely Deals
Enterprise Irregulars (blog)
And then, provided you have sufficient pipeline, your sales management team basically puts all of its effort into and attention on the commit and forecast deals. They're the ones that get deal reviews. They're the ones where the team does multiple dry ...


VP Sales & Manufacturing Receives Accreditation for its Quality Management System
PR Newswire (press release)
PRI Registrar recognizes VP Sales & Manufacturing for its commitment to continual improvement in their management system. "We are proud to achieve registration in recognition of a quality management system in conformance to the ISO 9001:2015 ...


The National

Emaar Hospitality seeks asset sales to focus on hotel management ...
The National
Emaar Hospitality IPO still on the cards, potentially within four years, Mohamed Alabbar tells CNBC Arabia.

and more »

Daily Herald

New RevRoad chief sales officer, Summer job fair Wednesday, Momentum Lehi extends food drive
Daily Herald
Myers comes to RevRoad with more than 22 years of sales management and leadership experience. He started his career as a public school teacher and went on to serve in several capacities at an education publishing company, and was recently area vice ...


Markets Insider

Druva Strengthens Senior Leadership Team with Key AppointmentsNew Chief Revenue Officer and Chief Marketing ...
Markets Insider
Freitag is a seasoned sales executive with more than two decades of sales, management and finance experience. As CRO, Freitag will have direct worldwide responsibility for revenue generating and customer-facing Druva teams. He will align company-wide ...


The Packer

Oakshire Mushroom adds sales manager
The Packer
Oakshire Mushroom Farm Inc., Kennett Square, Pa., has hired Mark Kreiner as sales manager. Kreiner has more than 20 years of experience in produce sales management, according to a news release, with the past six years spent in fresh mushrooms.


Global Quality Management Software Sales Market Research 2017 to 2024
Chronicle India
Quality Management Software Sales Market report defines complete industry overview with comprehensive analysis. This report also offers the in-depth analysis of each segment in terms of opportunity, market attractiveness index and growth rate which ...


Training Journal

What elements do world-class sales managers have in common?
Training Journal
Sales managers have one of the most important roles in any sales organisation, because they oversee the sales team itself. As a result, they have a role to play in hiring new talent, retaining existing talent and ensuring all salespeople have the ...
A Prescription For Sales Enablement: Start With The Problem, Not SolutionForbes

all 2 news articles »

Global Requirements Management Software Market 2018 Industry Production, Supply, Sales and Demand Market ...
Chronicle India
Worldwide Requirements Management Software Market 2018 Production, Supply, Sales, and Demand on Requirements Management Software Market Research Report is in-depth research report on Requirements Management Software. From two aspects: ...

Google News

Producing Premium Performance

One of the major issues that arises in managing a... Read More

Overcoming Sales Objections for Small Business Networks

Do you need help overcoming sales objections? Do you sell... Read More

How To Become A Better Sales Manager

YIPPEE! Kendra won, or should I say, "She was hired,"... Read More

The Art and Science of Managing Expectations in Selling

It is very easy to fall into a trap with... Read More

10 Things to Help Your Business When Sales Are Slow During the Holidays

Twiddling your thumbs and waiting for some business to come... Read More

How Many Salespeople Should I Hire?

One of the most asked questions I get is how... Read More

How to Sell Strategically

If you want to maximize your sales performance, take a... Read More

Are Your Business Proposals Losing You Sales? 10 Steps to Get the ?Yes? You Deserve

Your ability to write an effective and persuasive business proposal... Read More

14 Top Lead Generation Tactics

According to former Harvard Business School professor David Maister, typical... Read More

How to Improve Your Management Procedures Usability

Are your people consistently following your procedures? Each year, organizations... Read More

How to Write a Business Plan Sales Section for a Mobile Service

We all agree one of the most important parts of... Read More

Profitable Relationships: Is It Amateur Hour or King of the Hill?

"We're in the relationship business?...airplanes are what we use to... Read More

Determining Sales Fit; the Key Growth Process for Your Business

Help your organization grow by assessing the right indicators in... Read More

How to Sharpen Your Sales Message with Do-it-Yourself Focus Groups - Small Business Power Tools

You've probably heard of focus groups. It's a tool that... Read More

Sales Pipeline Forecasting Is There A Better Way?

To put it mildly most companies sales forecasting just isn't... Read More

T. L. S. Part I: Tier Level Selling ? A Penetration Strategy

A number of sales "Gurus" have promoted the theory that... Read More

All Small Businesses Need to Gather Community Intel

How well do you know your community? As business owners... Read More

8 Procedures to Take Control of Sales and Marketing

The Cash to Cash Cycle Part Three of SeriesWe're sprinting... Read More

The Effective Executive

What does it mean to be an "effective executive"? Well... Read More

6 Steps to Avoid Losing Summer Sales

It's a fact - the online world dies down in... Read More

Sex, Drugs, & Rock-n-Roll at Trade Shows

Here's the Scenario...You're at a trade show. Out of town.... Read More

Leadership Lessons for Sales Managers

Leadership, like class, is hard to define, but easy to... Read More

Sales Coaching... Fact or Fiction?

The old adage in selling has always been, "Find out... Read More

Promoting Your Private Label at Industry Trade Shows

So everyone thought you were crazy when you announced 6... Read More

How to Maximize Account Penetration and Jump-Start Sales

Maximizing account penetration is one of the most critical functions... Read More