Let’s have a look at your sales forecast
‘ is one question that seems to have my business coaching clients squirming in their seats, and researching this blog, seems to confirm that
small business owners don’t write sales forecasts;
whether it’s fear of numbers, not knowing where to start or simply not seeing the value for their business. Even if you avoid all the other numbers for your business this is one set you definitely need.
Here are 5 reasons why you should forecast the sales for your business today.
1. In my blog about goal setting
we established the need to set goals for motivation and to drive higher performance. It is important to break down long term goals into shorter, sub goals. Well, the sales forecast sets that out for you in black & white. Starting with a £120,000 year end of goal is daunting, yet breaking that down to £10,000 per month and then by product sales enables to you see how realistic your goal really is.
2. A sales forecast is central to your regular business review. At the end of each month you can compare actual vs forecast.
Which product/service sales were up?
What was down?
Most importantly what can we learn from this – what impact did your marketing activities? What about the weather/seasonal /local/ national events? and how will this information affect your planned activity for next month?
Setting a standing date in your diary – i.e first Friday of the month – will ensure this review happens regularly.
3. Decision making – From which marketing activities to pursue or repeat, to price increases and taking on staff. Having real time information allows you to look ahead and make decisions to allow for growth or to quickly identify areas of concern.
4. Longer term planning – At the end of the first year, you can use the actual sales figures as the starting point for next years forecast. If you understand the impact of external forces on sales, you will be able to provision for those in your new forecast making it more accurate each time. If you want to grow turnover by 10%, 30% or 100% next year what does that mean in reality for sales, pricing and resources? you can model a range of scenarios in your forecast spreadsheet.
5.Feeling in control – one of the key concerns of business owners is not knowing what is going on in the business. A monthly review of your sales forecast gives you real information, peace of mind and regular opportunities to celebrate.