What is a Sales Forecasting?
Sales forecast projects what a salesperson, team, or company will sell weekly, monthly, quarterly, or annually. Managers use representatives’ sales forecasts to estimate the business their team will close. Directors use team forecasts to anticipate department sales.
The Head of Sales uses department forecasts to project organization sales. These reports are typically shared with company leadership, along with board members and stockholders.
Why Sales Forecasting Is Important?
Sales forecasts allow spotting potential issues while there’s still time to avoid or mitigate them. Sales forecasts also come into play for several decisions, from hiring and resource management to goal-setting and budgeting
It is an excellent tool for estimating and anticipating future demand for your products. sales forecasting for new business will assist you in knowing what supplies and components to have on hand and which ones you can hold off ordering or producing until a later time.
10 Factors that can impact Sales Forecast
- Hires and Fires
- Policy Changes
- Territory Shifts
- Competitive Changes
- Economic Conditions
- Market Changes
- Industry Changes
- Legislative Changes
- Product Changes
Sales Forecasting Techniques
Not all sales forecasting methods are created equal. Here are some of the most significant ways to forecast sales. We’ve also included some examples to further illustrate each sales forecasting method.
- Opportunity Stage Forecasting
- Length of Sales Cycle Forecasting
- Intuitive Forecasting
- Historical Forecasting
- Multivariable Analysis Forecasting
How detailed should your forecast be?
To be effective, sales forecasting must be considered a way to keep up with sales, expenses, and product tracking, while at the same time, understanding that changes will inevitably occur when trying to chart and coordinate these components months in advance. Sales forecasting is helpful in that it allows you to see the changes and problems as they happen.
Sales forecasting for new business when you can anticipate sales, you will be better able to predict revenue levels and profit margins and improve your net income through control of excess and unnecessary output.
Sales forecasting is only effective if you plan and implement it with regularity. Reviewing and updating data is part of that process, as is looking at what went right and also what has gone wrong. Revising your numbers and adjusting your marketing programs will ensure that you continue to take advantage of what is working and can effectively alter what is not.
Sales forecasting is a matter of ongoing planning and can lead to more productive business, just as obtaining the correct professionally researched and written business plan will make a great difference in your long-term business future.