Sales Forecasting is a subject close to my own heart as I am in the process of designing and implementing a product designed for the smaller business which will be completed later this year.
You actually may consider that it is impossible to forecast accurately. That is most probably true but you must try.
You business depends on selling goods or services and you cannot effectively plan if you don’t have any idea what you will sell, month by month in the first year of your plan, followed by quarter by quarter for the next two years.
So where do you start – what are the basics of your forecast?
There may historical published data on the sales for your kind of goods and services or maybe you have results of your own past efforts. Also there will be results from market research.
At this stage you also need to consider the environmental elements that may influence the market. For example with the recent downturn in the economy and the financial squeeze on household income will your service or goods be a necessity or a luxury.
Your own,and that of your colleagues, judgement of the situation is something you need to draw on but this will depend on :-
- How well you have identified your market niche, and set your prices?
- How are your skills at reaching your customers and convincing them of the benefits they will gain from your USP?
- How much you have to change course due to unexpected activity from your competitors or other factors?
You would be surprised at the some of the large organisations who still plan on the ‘back of fag packets’ and have no structured process in place.
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