Taking the Guess Out of Sales Forecasts Peoria IL

Take The Guess Out of Sales Forecasts

Author: Dan Boudreau

For new business start-ups, projecting sales can be a frustrating, uncertain experience. To go into a business without having some idea of how much you'll sell might be thrilling for a gambler, but if you stand to lose a lot, it's just too risky.

Here are a few tips for bringing order to your forecasting chaos:

1. Determine what your units will be (i.e. by product, service, or average sale). If you're getting into a service business, each hour of billable time will be a unit. For example, one hour would be a unit for an automotive shop.

2. The first year of your sales forecast should be projected monthly for each of the first 12 months. Anything beyond the first year is typically only yearly totals.

3. Find a way to speak with potential customers and in doing so, get commitments to purchase from your business. This can be challenging for a business not yet started. For example, a signed contract removes much of the uncertainty, a letter of intent less so but still quite compelling. The more of your sales figures you can validate or support with actual ready-to-pay customers, the more credible your forecasts are likely to be.

When it is time to look into your crystal ball, don't be afraid. Roll up your sleeves, talk to potential customers, and use what you know to fine tune until you've created a realistic, credible forecast. Once you have confidence in it, you should have an easier time convincing your banker to believe it.

About the Author:

Dan Boudreau makes business planning achievable, fast and fun. Want to learn more about how to do your own business plan? Subscribe to the RiskBuster Newsletter and instantly download a free copy of Dan's popular fast-track business plan template

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